Sun Pharma, India’s largest pharmaceutical company, has announced its biggest overseas acquisition by buying US-listed Organon & Co for $11.8 billion (around Rs 98,000 crore) in an all-cash deal.
The acquisition will expand Sun Pharma’s global presence and product portfolio, adding access to over 140 markets, including China, along with therapies in women’s health, biosimilars, and established medicines.
The company will pay $14 per share, a premium of more than 24% over Organon’s last closing price, making it one of the largest M&A deals by an Indian firm.
Once completed, the acquisition is expected to double Sun Pharma’s revenue to $12.4 billion and significantly boost earnings, placing it among the world’s top 25 pharmaceutical companies. Organon, which was spun off from Merck in 2021, adds over 70 products and six global manufacturing facilities.
The deal extends Sun Pharma’s long-standing M&A strategy, including the Ranbaxy acquisition in 2014 and several licensing deals, which together helped drive a 14% revenue CAGR between FY10 and FY25.
Chairman Dilip Shanghvi said the company avoids excessive debt but is open to strategic risks, noting that the Organon acquisition provides immediate entry into biosimilars, a segment that would otherwise take years to build.
The acquisition is expected to make Sun Pharma a top-three player in women’s health and the seventh-largest biosimilars company globally. Analysts said the deal, valued at around six times EBITDA, appears financially disciplined and supported by strong cash flows.
Sun Pharma is also expected to seek RBI approval for exemptions related to foreign remittance rules for the $11.75 billion deal, along with plans to refinance about $8 billion of Organon’s debt under overseas investment regulations.
Experts said the transaction is structured as a leveraged buyout, with debt placed in an offshore special purpose vehicle and serviced through Organon’s cash flows after integration, while Sun’s role would mainly involve equity funding and guarantees, subject to regulatory approval.
