Sun Pharma shares rise 7% as India’s largest pharmaceutical company acquires US company Organon

Shares of Sun Pharmaceutical Industries, India’s largest drugmaker, rose more than 7% on Monday after the company announced it would acquire New Jersey-based Organon & Co. in an all-cash deal.

The Company plans to acquire all of the Company’s outstanding shares. organon $14 per piece, according to exchange filings Sun Pharmaceutical.

“After a comprehensive review of strategic alternatives, the board of directors determined that this all-cash transaction provides attractive and immediate value to Organon shareholders,” Carrie Cox, Organon’s executive chairman, said in a joint statement.

organonwhich was spun off from Merck in 2021 and specializes in women’s health and biosimilars, sells more than 70 products in 140 countries.

According to a joint statement, the acquisition will give generic drug giant Sun Pharma $12.4 billion in sales and make it one of the world’s top 25 pharmaceutical companies. As of Friday, Sun Pharma had a market capitalization of more than $41 billion, according to LSEG data.

“This transaction is a natural next step in strengthening Sun Pharma’s global operations,” said Kirti Ganorkar, Managing Director of Sun Pharma. The acquisition of Organon will help the Indian company expand its pharmaceutical offerings, as the US is an important market.

The Indian company said in a statement that the acquisition of Organon is part of Sun Pharmaceutical’s “growth of innovative medicines business” strategy. According to the European Medicines Agency, innovative medicines contain active substances or combinations of active substances that have not been previously approved.

Sun Pharma’s innovative medicines currently cover dermatology, ophthalmology and dermato-oncology.

In the fiscal year ending March 2025, Sun Pharma’s Innovative Medicines division, which accounted for 20% of total sales, will contribute 27% to sales with the acquisition, according to the statement.

“Organon’s portfolio, capabilities and global reach are highly complementary to ours,” said Dilip Shanghvi, Sun Pharma’s executive chairman, in a release.

Organon’s primary markets are the United States, Europe, China, Canada and Brazil, supported by six manufacturing facilities across the European Union and emerging markets.

Organon shares rose nearly 31% on Friday after Indian newspaper The Economic Times reported that Sun Pharma would buy Organon for about $13 billion, citing people familiar with the matter.

“Such deals are strategically positive but financially sensitive,” said Bhavesh Shah, managing director and head of investment banking at Mumbai-based Equilus Capital.

He said such acquisitions “could be accretive in the medium to long term” if they strengthen a company’s portfolio, market reach and increase scale, but added that in the short term, such acquisitions could lead to “increased leverage integration costs and execution risks.”

Organon had debt of $8.6 billion and cash balance of $574 million at the end of December 2025. Organon’s net debt to earnings before interest, tax, depreciation and amortization (EBITDA) ratio is 4x, while Sun Pharma’s is “net positive.”

Post-acquisition, the combined company’s net debt-to-EBITDA ratio will be 2.3x.

However, this is not the first time Sun Pharma has acquired an ailing business. In 2007, he successfully acquired Taro Pharma, an Israeli research company listed in New York that was in financial trouble.

In 2014, the company acquired Ranbaxy Laboratories, which is under regulatory action from the U.S. Food and Drug Administration, from its Japanese owner Daiichi Sankyo for about $3.2 billion in stock.

Organon is Sun Pharma’s sixth acquisition in the past 16 years.