Sun Pharmaceutical Industries Ltd on Monday said it will acquire US-based Organon & Co in an all-cash transaction at an enterprise value of $11.75 billion, marking the largest overseas acquisition by an Indian pharmaceutical company and the second biggest outbound deal by an Indian firm after Tata Steel acquired Corus in a $12-billion deal in 2007.
Under the definitive agreement, Sun Pharma will purchase all outstanding shares of Organon at $14 per share. The transaction, expected to close in early 2027, subject to regulatory approvals, will significantly scale up Sun Pharma’s global operations. The combined entity is projected to have revenues of around $12.4 billion, nearly double Sun Pharma’s FY25 revenue of $6.2 billion, and position it among the world’s top 25 pharmaceutical companies.
The acquisition will be financed through a mix of internal accruals and debt. Sun Pharma said it will deploy $2–2.5 billion from cash reserves, while the remaining $9.25–9.75 billion will be funded through committed bank financing. Despite the size of the deal, the company expects leverage to remain within manageable levels, with net debt-to-EBITDA estimated at 2.3 times for the combined entity.
“The key difference in my mind is the difference in our growth trajectory. Sun has been consistently growing, while Organon has not been growing. For us to create value, we have to find a way to grow the business much better than what it has been able to do,” said Dilip Sanghvi, executive chairman, Sun Pharma.
“Following a comprehensive review of strategic alternatives, our board determined that this all-cash transaction offers compelling and immediate value to Organon stockholders,” said Carrie Cox, executive chair of Organon
Global presence
Organon’s portfolio comprises more than 70 products spanning women’s health, biosimilars and established medicines, with a commercial presence in over 140 countries. Key markets include the US, Europe, China, Canada and Brazil. The company also operates six manufacturing facilities across Europe and emerging markets.
The acquisition gives Sun Pharma a wider global presence, with 18 large markets, each generating over $100 million in revenue.
“What Organon is giving to Sun is a global commercial presence and a global platform to commercialise our existing products as well as future products. It also gives us entry in some of the markets where we are not present today, and one notable market is China,” said Kirti Ganorkar, MD, Sun Pharma.
“We will now be present in the world’s second biggest market on our own, and we can use both Sun’s portfolio as well as Organon’s portfolio to grow the business,” Ganorkar said.
The deal also enables Sun Pharma’s entry into biosimilars as a top-10 global player, the company said.
Debt and dividend
Addressing concerns around the high level of debt, Shanghvi emphasised the company’s track record of deleveraging, citing that even after the Ranbaxy acquisition, the company had repaid debt swiftly. “As a company, we are debt-averse. However, we are not risk-averse,” he said. He added that the company has factored in shareholder expectations and aims to maintain dividend payouts.
Stocks zoom
Shares of Sun Pharma rose 7.3 per cent on the BSE following the announcement, reflecting investor optimism. Analysts largely view the valuation as reasonable but caution that near-term challenges could arise from integrating two large businesses, reviving growth in Organon’s established brands and generics portfolio, scaling up the biosimilars segment, and servicing of debt.
