Sun Pharma, Israeli firm merger delayed further

Sun Pharma, Israeli firm merger delayed further


Mumbai: Israeli drug company Taro Pharmaceutical Industries has rescheduled its shareholders’ meeting to late October or November to consider its merger with Sun Pharmaceutical Industries.

The earlier meeting was scheduled for 25 September.

Taro said on its website that the meeting would be held after the availability of financial results for the year ended 31 December, 2006 and for the first and second quarters of 2007.

A number of Taro shareholders have requested updated financial information in conjunction with their consideration of the proposed merger with Sun, it said.

This is the second time the shareholders’ meeting is being postponed. Earlier, 25 July was decided for shareholders meet, which was postponed to 25 September to give more time to shareholders to think about the merger.

Sun’s proposed merger with Taro would be the second biggest buy by an Indian pharma company abroad. Sun Pharma in May agreed to buy Taro for $454 million (Rs1,800 crore).

The biggest acquisition by an Indian drug company was done by Dr Reddy’s when it acquired Germany’s Betapharm in 2006 for €480 million (Rs2,250 crore).

Taro’s merger with Sun would give the Indian company access to two new markets — Canada and Israel, a Sun Pharma spokesman said. The Canadian market for Taro is about $30 million and Israel $20 million.

The reason for Taro’s merger with Sun is because the Israeli company has an exposure to the US market. About 90% of the Taro’s sales are to North America.

Sun, whose 25% revenues comes from the US market, wants to increase its presence in the world’s biggest market, the spokesperson said.

Sun needs at least 75% acceptance of its proposal to go through at Taro’s general meeting and a section of minority shareholders are opposed to the merger.

The minority shareholders bought Taro shares at a higher price and the price at which Sun is offering them now is unacceptable to them. Franklin Advisers and Templeton Assets Management own 9% of the ordinary shares of Taro, and are opposed to the merger.

Sun plans to fund its merger with Taro through its internal accruals and from its earlier foreign currency convertible bonds for $350 million.