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News Topical, Digital Desk : Shares of Sun Pharmaceutical Industries fell nearly 4% on Friday. The decline, despite a strong market, is primarily due to the company's progress toward acquiring American pharmaceutical company Organon.
According to reports, Sun Pharma has begun preparing to submit a binding offer of approximately $12 billion (approximately ₹1 lakh crore) to acquire Organon. The company has completed the nearly three-month due diligence process and is now finalizing the financing package.
Why is the stock under pressure?
According to experts, investors are increasingly concerned about debt and financing due to such a large deal. Although Sun Pharma has approximately $3.2 billion in net cash, the acquisition is expected to increase its debt-to-EBITDA ratio. Analysts say the company's current debt-to-EBITDA ratio is 4x, which could drop to around 2x after the acquisition.
Profile and Prospects
Organon specializes in women's health and was spun off from Merck Sharp & Dohme in 2021. The company has a market cap of approximately $1.5 billion.
Its portfolio includes cardio ($1.1 billion), respiratory ($842 million), and pain, bone, and derma ($987 million). Its lead drug, VTAMA, has estimated potential sales of $400–800 million.
Major deals so far:
- Acquisition of Checkpoint Therapeutics in 2025
- Acquires full stake in Taro Pharma in 2024
- Investments in Concert Pharma and Vivaldis Animal Health in 2023
Stock Performance:
Sun Pharma shares were trading down about 3.9% at ₹1,650.3 on Friday. It was the top loser in the Nifty 50 index and has fallen about 9% in the past month. This deal could be strategically beneficial for the company in the long term, but in the short term, risks related to debt and financing could pressure the stock.
Read More: Share Market News: Sensex jumps 4200 points in 1 week, eight big companies gain Rs 4.13 lakh crore
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