Sun Pharma ends deal to take over Israeli unit Taro

Fri Feb 8, 2013 9:50pm IST

Related Topics

Stocks

   

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)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Adani Project

Adani Project

Australia approves Adani's $16 bln Carmichael coal project  Full Article 

India-U.S. Talks

India-U.S. Talks

Kerry to woo Modi's India, but quick progress unlikely  Full Article 

Paring Debt

Paring Debt

Jaiprakash to sell hydro plants to Reliance Power  Full Article 

Nifty Falls

Nifty Falls

The broader index hits lowest in nearly a week on profit taking  Full Article 

Mideast Conflict

Mideast Conflict

U.N. Security Council calls for humanitarian ceasefire in Gaza  Full Article 

Market Eye

Market Eye

Foreign investors prefer Indian cyclicals, utilities - Macquarie  Full Article 

Debt Investment

Debt Investment

India's FII debt limit hike credit-positive, says Moody's  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage