SHANGHAI, CHINA – NOVEMBER 05: People visit the booth of Organon during the 7th China International Import Expo (CIIE) at the National Exhibition and Convention Center (Shanghai) on November 5, 2024 in Shanghai, China. The 7th China International Import Expo (CIIE) kicked off in Shanghai on November 5. (Photo by Tang Yanjun/China News Service/VCG via Getty Images)
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Shares in Sun Pharmaceutical Industries rose 5% Monday, after India’s largest drugmaker announced it will acquire New Jersey-based Organon & Co in an all-cash deal that values the U.S. company at $11.75 billion, including debt.
The company will acquire all outstanding shares of Organon for $14 apiece, according to an exchange filing Monday by Sun Pharmaceutical.
“Following a comprehensive review of strategic alternatives, our Board determined that this all‑cash transaction offers compelling and immediate value to Organon stockholders,” said Carrie Cox, executive chair at Organon, in the joint statement.
Organon, which was spun off from Merck in 2021, specializes in women’s health and biosimilars and has more than 70 products that are sold across 140 countries.
The acquisition will help lift Sun Pharma, a generics major, into the top 25 global pharmaceutical companies, with a revenue of $12.4 billion, according to the joint statement. According to LSEG data, Sun Pharma has a market cap of more than $41 billion.
“This transaction is a logical next step in strengthening Sun Pharma’s global business,” said Kirti Ganorkar, managing director at Sun Pharma. Organon’s buyout will help the Indian company scale its medicine products, as the U.S. is a key market.
The Organon buyout is part of Sun Pharmaceutical’s strategy “of growing its Innovative Medicines business,” the Indian company said in a statement. As per the European Medicines Agency, an innovative medicine contains an active substance or a combination of active substances that has not been authorized before.
Sun Pharma innovative medicine products currently cover dermatology, ophthalmology, and onco-dermatology.
In the financial year ending March 2025, the Sun Pharma’s innovative medicine segment accounted for 20% of its total sales, but with the acquisition, it will contribute 27% to the topline, as per the statement.
“Organon’s portfolio, capabilities and global reach are highly complementary to our own,” Dilip Shanghvi, executive chairman of Sun Pharma, said in the release.
Organon’s key markets are the U.S., Europe, China, Canada, and Brazil, which are supported by six manufacturing facilities across the European Union and emerging markets.
Organon shares had risen nearly 31% on Friday after Indian newspaper the Economic Times reported, citing sources, that Sun Pharma was buying Organon for about $13 billion.