Sun Pharma ends deal to take over Israeli unit Taro
REUTERS - Sun Pharmaceutical Industries Ltd (SUN.NS), which has been on a buying spree, ended its agreement to gain full control over its Israeli unit Taro Pharmaceutical Industries Ltd (TARO.N).
The companies decided that ending the deal was in the best interest of their shareholders, Sun Pharma and Taro said in a statement.
"The decision (to not merge Taro) could prove beneficial for Sun Pharma as long as Taro is generating good cash flow," said Siddhant Khandekar, an analyst at ICICI Direct in Mumbai.
"There might be structural issues while handling Taro, but it won't hurt Sun to a large extent."
Sun Pharma had last offered $39.50 per share, or about $571 million, for the one-third stake it did not already own in Taro, seemingly winning over the Israeli company's board following a long battle to gain full control of the U.S.-listed drugmaker.
Raising the price beyond $39.50 per share did not make any sense for Sun Pharma, Khandekar said.
Sun Pharma, India's biggest drugmaker by market value, remains one of the few Indian pharma companies that has done successful international acquisitions at a time when global pharmaceutical giants such as Abbott Laboratories (ABT.N) and Sanofi SA (SASY.PA) have been buying out Indian drug companies at high valuations.
Sun Pharma bought U.S.-based Dusa Pharmaceuticals Inc DUSA.O for about $230 million and URL Pharma from Japan's Takeda Pharmaceutical Co (4502.T) for an undisclosed amount last year.
Taro shares were up 2 percent at $51.75 in morning trade on the New York Stock Exchange. Sun Pharma shares closed down marginally at 746.10 rupees on Friday on the National Stock Exchange. (Reporting by Esha Dey in Bangalore and Kaustubh Kulkarni in Mumbai; Editing by Roshni Menon)
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