Mumbai: India’s second-biggest overseas acquisition was stitched together over three months of near-daily negotiations between the bidder, the seller and their bankers, said a banker aware of the details behind the transaction.
Mumbai-based Sun Pharmaceutical Industries Ltd on Monday said in an exchange filing it will acquire US-headquartered Organon & Co for about $11.75 billion. This is the largest overseas deal by an Indian company since Tata Steel acquired UK-based Corus Group for $12 billion in 2007.
The deal was always pitched at around $12 billion from both sides, with negotiations neither exceeding nor materially falling from that level, the person cited above said on the condition of anonymity.
“The deal was out in the market sometime late 2025, and Sun was very interested because it gave them access to more than 100 countries across the world and also complemented the product suite,” said the banker. “It also helps them get a further boost on women’s health.”
Regulatory approvals required
The acquisition will require regulatory approvals across multiple jurisdictions, including China, and could take four to five months, the banker said.
According to the banker, the deal was negotiated by Sun Pharma’s founder and executive chairman Dilip Shanghvi, along with long-term company insider Sanjay Jerry.
Citigroup Global Markets Asia Ltd, JPMorgan Chase Bank N.A., and MUFG Bank Ltd are the financing banks to Sun Pharma.
Sun Pharma said in the exchange filing that it will acquire all outstanding shares of Organon at $14 each in an all-cash transaction. The deal will be funded through $2-2.5 billion in cash and committed bank financing of $9.25-9.75 billion. Sun Pharm will also assume Organon’s debt of about $8.6 billion.
“It is a US dollar financing commitment and is quite well priced compared to any of similar transactions of this size and scale,” the banker said. “This is bridge finance for about 18 months and the final structure has not yet been decided.”
Reassessing debt raise
The company may not draw the entire loan, the banker added, as it assesses how much debt to raise based on available cash and potential consent from existing bondholders.
“Today, Organon is not an investment-grade company, but with Sun Pharma acquiring it, the company will become an investment-grade company. This means that existing bondholders of Organon will be happy to swap their bonds from the target to Sun,” the banker said.
Organon was spun off from Merck in 2021, housing its women’s health, legacy general medicine brands, and biosimilars businesses.
With the acquisition, Sun Pharma will enter biosimilars among the top 10 players globally and become one of the top 25 pharmaceutical companies, with combined revenue of about $12.4 billion, double its $6.2 billion revenue in FY25. Its share of revenue from innovative medicines will rise to 27%.
