Sun Pharmaceutical Industries has announced a $11.75 billion acquisition of US-based pharmaceutical firm Organon & Co., one of the country's largest overseas pharma deals by an Indian company. The cash deal, priced at $14 a share, values Organon at $11.75 billion and boosts Sun Pharma's footprint in the US pharmaceutical market.
The company's statement to the stock exchange reveals Sun Pharma will
buy 100% of Organon's equity, and also assume around $8.6 billion in debt. The deal will be financed by a combination of funds from Sun Pharma and a bank loan.
“The proposed acquisition of Organon is in line with Sun Pharma's plan to expand its Innovative Medicines business," it said, adding that it will be moving up the value chain.
Organon reported a revenue of $6.2 billion in FY25 with an adjusted EBITDA of $1.91 billion, a healthy 30.7% margin. The move will take Sun Pharma’s revenue to $12.4 billion, making it one of the top 25 pharmaceutical companies in the world.
The deal will give Sun Pharma a strong presence in high-growth areas like biosimilars and women's health. Organon is already a leading player in these areas, and the acquisition is likely to move Sun Pharma into the top 10 globally in biosimilars.
Additionally, the deal increases Sun Pharma's portfolio of innovative medicines, which now accounts for 27% of its revenue. This is in line with its plans to diversify its portfolio away from generics and into specialty and branded drugs.
Organon recorded sales over $1.6 billion in North America in FY25, boosting Sun Pharma's presence in the US, where it is already the fifth-largest generics company.
The news had a positive impact on the market; at the press time, Sun Pharma shares are up 7.04% to trade at Rs. 1,734. Also, Organon's shares have gained over 80% in the past month on takeover rumours.
However, Organon's debt burden and revenue decline, down 3% year-on-year in FY25, remain a concern. The analysts point out that the deal's value will depend on effective integration and debt management.
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Acquisitions have been a key strategy for Sun Pharma's global expansion. Starting with domestic acquisitions in the 1990s and growing to large international acquisitions such as the $4 billion Ranbaxy deal in 2014, the company has grown organically.
Founder Dilip Shanghvi's vision has seen the company shift focus to niche acquisitions in specialty and innovation-focused areas, such as recent acquisitions Concert Pharmaceuticals and Checkpoint Therapeutics.