Sun Pharma Moves Closer to $12 Bn Organon Acquisition, Banks Line Up Financing

Sun Pharmaceutical Industries is moving closer to submitting a binding offer worth $12 billion for US-based Organon & Co, in what would be the largest overseas acquisition ever attempted by an Indian pharmaceutical company, according to Economic Times.

The Mumbai-based drugmaker has completed more than three months of detailed due diligence and is now assembling a financing package ahead of a formal offer expected in the coming weeks.

ET was the first to report on January 19 that Sun Pharma was weighing an acquisition of Organon.

At least four global banks have been brought on board to back the all-cash bid. These banks are JPMorgan, MUFG, Standard Chartered and Citi. Notably, JPMorgan is also serving as Sun's financial advisor, with law firm AZB handling legal counsel.

Who Is Organon?

Organon is a global healthcare company formed in 2021 through a spinoff from MSD (Merck Sharp & Dohme). It is headquartered in Jersey City, New Jersey. The company specialises in women's health, biosimilars, and a broad portfolio of established medicines including cardiovascular, respiratory, and dermatology drugs.

Organon, however, has been under significant financial strain, carrying $9.5 billion in debt inherited at the time of its separation from MSD, while facing mounting competition from both global pharmaceutical players and generic drug suppliers.

It has been also reported that Sun Pharma is not the sole contender. Two other international consortiums, one led by a buyout fund and another combining a strategic investor with a European buyout firm, are also in the running. Organon has engaged Morgan Stanley to explore options, including a sale of part or all of its business.

The potential deal reflects the broader ambitions of Sun Pharma's chairman, Dilip Shanghvi, who has consistently urged Indian drugmakers to invest in innovative research and pursue acquisitions to build global scale, without abandoning their stronghold in generics.

Sun Pharma has been steadily growing its innovative drug portfolio in recent years. Its acquisition of Checkpoint Therapeutics last year, valued at up to $416 million, gave the company access to Unloxcyt, an anti-cancer therapy. Revenues from 11 of its innovative drugs in the US reached $1.21 billion, led by Ilumya, its treatment for plaque psoriasis, which alone generated $681 million in sales.