Sun Pharmaceutical Industries Ltd.
Sun Pharmaceutical Industries Limited is an Indian global pharmaceutical company headquartered in Mumbai, Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States. The company offers formulations in various therapeutic areas, such as cardiology, psychiatry, neurology, gastroenterology and diabetology. It also provides APIs such as warfarin, carbamazepine, etodolac, and clorazepate, as well as anticancers, steroids, peptides, sex hormones, and controlled substances. Established in 1983, listed since 1994 and headquartered in India, Sun Pharmaceutical Industries Ltd. is an international, integrated, specialty pharmaceutical company. It manufactures and markets a large basket of pharmaceutical formulations as branded generics as well as generics in India, the United States and several other markets across the world. In India, the company is a leader in niche therapy areas of psychiatry, neurology, cardiology, gastroenterology, orthopedics and ophthalmology. Sun Pharmaceutical has strong skills in product development, process chemistry, and manufacturing of complex API, as well as dosage forms. Sun Pharma was established by Mr. Dilip Shanghvi in 1983 in Kolkata with 5 products to treat psychiatry ailments. Cardiology products were introduced in 1987 followed by gastroenterology products in 1989. Today it is the largest chronic prescription company in India and a market leader in psychiatry, neurology, cardiology, orthopedics, ophthalmology, gastroenterology and nephrology. Some of the top brands of the company include pantocid, susten, aztor, gemer, repace, glucored, strocit, clopilet and cardivas. Over 57% of Sun Pharma sales are from markets outside India, primarily in the US. Manufacturing is across 23 locations, including the US, Canada, Brazil, Mexico and Israel. In the US, the company markets over 200 generics, with another 150 awaiting approval from the USFDA. Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times. The founding family continues to hold a majority stake in the company. Today Sun Pharma is the third largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalization on the Indian exchanges.[4]The Indian pharmaceutical industry has become the third largest producer in the world and is poised to grow into an industry of $ 20 billion in 2015 from the current turnover of $ 12 billion
Taro Pharmaceutical Industries Ltd.
Taro Pharmaceutical Industries Ltd. (Taro), incorporated in 1959, is a multinational, science-based pharmaceutical company. The Company develops, manufactures and markets prescription and over-the-counter (OTC) pharmaceutical products, primarily in the United States, Canada and Israel. It also develops and manufactures active pharmaceutical ingredients (APIs), primarily for use in its finished dosage form products. Its primary areas of focus include pediatric creams and ointments, liquids, capsules and tablets, mainly in the dermatological and topical, cardiovascular, neuropsychiatric and anti-inflammatory therapeutic categories. It operates principally through three entities: Taro Pharmaceutical Industries Ltd. (Taro Israel), and two of its subsidiaries
multinational, science-based pharmaceutical company, dedicated to meeting the needs of its customers through the discovery, development, manufacturing and marketing of the highest quality healthcare products.
Merger
Sun Pharmaceutical and Taro Pharmaceutical Industries Ltd. announced that they have entered into a merger agreement together with certain affiliates of Sun Pharmaceutical. The merger agreement provides that all shareholders of Taro other than Sun Pharmaceutical and its affiliates will receive a cash payment of $ 39.50 per share upon the closing of the merger. Sun Pharmaceutical and its affiliates collectively own approximately 66.0% of the outstanding Taro ordinary shares and 100% of Taro’s founder’s shares, representing approximately 77.5% of the outstanding voting power in Taro. Upon completion of the merger, Taro will become a privately held company, will be wholly owned by affiliates of Sun Pharmaceutical, and its ordinary shares will no longer be traded on the New York Stock Exchange. The closing of the merger is subject to certain terms and conditions customary for transactions of this type, including the affirmative vote at the shareholder meeting to be convened to approve the merger
1) At least 75% of the voting power of the Taro ordinary shares voting at the Shareholder Meeting,
2) At least 75% of the voting power of the Taro founders shares voting at the Shareholder Meeting and
3) At least 75% of the total voting power of Taro (ordinary shares and founders shares together) Voting at the Shareholder Meeting, including at least a majority of the voting power voted that is not held by Sun Pharmaceutical or its affiliates unless the total voting power of Taro held by holders other than interested shareholders and voting against the merger does not exceed 2% of the total voting power of Taro. In connection with the proposed transaction, Taro intends to mail a proxy statement to its shareholders and to file relevant materials with the United States Securities and Exchange Commission. The merger agreement was approved by Taro’s Board of Directors based upon the recommendations and approvals of the Special Committee of Taro’s Board of Directors the “Special Committee” and the Audit Committee of Taro’s Board of Directors. The Special Committee was advised by its independent financial advisor Citigroup Global Markets Inc. and its independent legal counsel Goldfarb Seligman & Co. as its Israeli legal counsel and Willkie Farr & Gallagher LLP as its United States legal counsel.
Safe Harbor Statement
Certain statements in the press release are forward looking statements within the meaning of the
announcement and involve certain risks and uncertainties that could cause actual results to differ materially from future results that may be expressed or implied by such forward looking statements. Various factors that could cause actual results to differ materially from those expressed in such forward-looking statements include, but are not limited to, risks associated with uncertainty as to whether the transaction will be completed, the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement, potential litigation associated with the transaction, the failure to obtain shareholder approval and the failure of either party to meet the closing conditions set forth in the merger agreement.
Unless required by law, neither Sun Pharmaceutical nor Taro undertake any obligations to update, change or revise any forward-looking statement, whether as a result of new information, additional or subsequent developments or otherwise.
Successful acquisition
On 13 August 2012, Sun Pharmaceutical Industries Ltd had completed the acquisition of a controlling stake in Taro Pharmaceutical Industries Ltd ending a three-year battle for control of the Israeli drug maker. Sun Pharmaceutical's units have increased their economic interest in Taro to 48.7% and their voting rights to 65.8%. The victory for Sun Pharmaceutical comes after a legal battle in Israel and in U.S. following Taro's termination in 2008 of a merger agreement signed between the two companies in 2007.In connection with the closing of the Option Agreement, Sun and the members of the current Board of Directors of Taro, including members of the Levitt and Moros families, have settled all outstanding litigation among themselves.
Sun Pharmaceutical intend to build on Taro's market presence in U.S., Israel and Canada and its expertise in dermatology and pediatrics, along with specialty and generic pharmaceuticals, and over-the-counter products. Sun Pharmaceutical Chairman Dilip Shanghvi has been appointed to serve as chairman of the Taro board.
Israeli Supreme Court ruled in favour of Sun Pharmaceutical by unanimously dismissing the appeal by Taro of the previous ruling by the Tel-Aviv District Court holding that the Israeli special tender offer (STO) rules do not apply to the Tender Offer by Sun Pharmaceutical’s subsidiary, Alkaloida Chemical Company Exclusive Group Ltd. to purchase all outstanding Ordinary Shares of Taro for $7.75 net per ordinary share in cash. At that time, Sun Pharmaceutical had a 36% equity stake in Taro with 24% voting rights. Sun Pharmaceutical had signed a $454 Mn merger agreement with Taro in 2007 including equity purchase of approximately $230 Mn at $7.75 per share in cash. However, in May 2008, Taro unilaterally terminated the agreement claiming lower valuations. In 2008, Sun Pharmaceutical launched an open offer to acquire additional stake in Taro, which was challenged by the latter. Both companies then filed suits in Israeli and the US courts. In a separate statement, Taro said its current board members were resigning and that appointees of Sun Pharmaceutical would become
directors of Taro, effective immediately.