Mumbai, Sept. 22: Sun Pharmaceutical today acquired a controlling stake in Taro Pharma, putting an end to a four-year legal battle.
The Mumbai-based company has acquired a 12.7 per cent stake from the Levitt and the Moros families for around $38 million, a company spokesperson told The Telegraph.
The development will see Suns economic interest in Taro rising to 48.7 per cent and voting rights to 65.8 per cent.
Sun had initially paid $105 million for a 36 per cent stake in Taro.
Taro said its founding families had reached an agreement with Sun that facilitated the immediate transfer of their interest in the Israeli firm to Sun in accordance with the option agreement previously entered into by the parties in May 2007.
Sun and the board of directors of Taro, including the members of the Levitt and the Moros families, have entered into a settlement agreement under which the board members will resign and nominees of Sun will become directors of Taro.
For Sun chairman Dilip Shanghvi, the development marks a much bigger victory. It will boost Suns generic offerings in Israel, the US and Canada. Taro has an established franchise in dermatology and topical products in the US, besides generic drugs in cardiovascular, neuro-psychiatric and anti-inflammatory categories.
It also has strategic sales and marketing operations in Israel and Canada, where it has facilities to manufacture creams, ointments, liquids, capsules and tablets. This complements Suns manufacturing and development capabilities in the US.
We are excited about completing this deal. We intend to build on Taros presence in the US, Israel and Canada and its expertise in dermatology, pediatrics, specialty and generic pharmaceuticals along with over-the-counter products, Shanghvi said.
He said Sun planned to increase production and investment in research and development in Israel and Canada, particularly in delivery systems and complex chemistry. The company also expects to increase the number of product filings of higher complexity by leveraging Taros scientific talent.
The bourses initially gave a thumbs up to the development, taking Sun shares to a yearly high of Rs 1,984.70 in intra-day trade on the BSE. However, the scrip ended at Rs 1,921.40, down 0.23 per cent from its previous close.