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Sun Pharma Case Study

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Mergers and acquisitions should be used to amplify strategies and growth. This business deal should facilitate the right combination of 4P’s-People, Processes, Product and Presence. The merged entity has to coordinate and deal with the 4P’s very efficiently and effectively. It has to cater to a more diversified and huger customer-supplier base, synergies of prices and costs, a wider range of products and services, and finally increase its visibility through tapping the right market. There has been a steady increase in the number of M&A transactions, nationally and globally due to various drivers like increasing visibility through establishing brands, decrease tax liabilities, jettison competition, revitalise loss making firms and corporations …show more content…

2008 and 2009 financials were unaudited which would have gone negative to Sun Pharma if the statement was not established as true and fair of those two years. There were quality issues in U.S. by US – FDA regarding the products which were sourced from Taro’s manufacturing unit in Canada. This transaction was definitely very complex and goes back to 2007, where Sun Pharma had signed a deal to acquire Taro for $454 million. The shareholders of Taro (other than Sun Pharma and its associates) would get $39.50 per share upon the close of the deal. It was denied by two shareholders of Taro- Raging Capital and Grand Slam, saying that the deal value offered by Sun Pharma was not sufficient and the amount should have been $110 per share. In 2010, Sun Pharma was granted by Israeli court to close the deal in the U.S. by acquiring all outstanding shares of Taro. The takeover battle was elicited by Taro as at least two of their shareholders said that the company (Taro) was not being properly valued by Sun Pharma. But the private agreement contained the provision of option agreement which said that if the merger failed, Sun Pharma can buy out the controlling or promoter’s stake of Taro Pharma. Sun Pharma had already invested $105 million over the three years from the date of merger to acquire 36% stake. If there was no catch in the deal, Sun Pharma would have paid $230 million at $7.75 per share, a 27% premium to Taro Pharma’s closing price of $6.10 in 2007. Sun Pharma had also agreed to take on Taro’s debt of $224 million. This just highlights the time and the complexities involved in merger- acquisition transaction to actually be a

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