Sun Pharma to acquire Organon for $11.75 billion in India’s biggest pharma deal

Dilip Shanghvi-led Sun Pharma has agreed to acquire US-based drug maker Organon for $11.75 billion in an all-cash deal. Sun will pay $14 per share, a premium of roughly 24% for the NYSE-listed company.

Sun’s move to acquire Organon marks the biggest ever transaction by an Indian pharma company, giving India’s most valued drug maker an entry into the US women’s healthcare market and access to a clutch of biosimilar products while adding significant heft in large and lucrative markets like China, Korea, EU, Mexico, and Thailand.

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Sun Pharma stock jumped at the news to end at ₹1,733.5, up 6.83% over the previous close on BSE. ET first broke the story of the initial deal discussions with Organon on January 19.

Concerns over Organon Debt

ET followed up when the deal entered the crucial binding bids stage and finally on April 26, a day before the official announcement.

Sun Pharma beat family-owned German drug maker Grunenthal, which had the backing from EQT, a bulge bracket global private equity investment firm.

Announcing the deal, a visibly relieved Shanghvi told reporters he was happy, excited and a little bit anxious. “It’s a large transaction that we are entering...It kind of reminds me of announcing the Ranbaxy transaction, we were a much smaller company,” he added, recalling the all-stock deal for $4 billion in 2014 that took Sun Pharma to a pole position in its home market.

Both Sun Pharma and Organon reported equal-sized annual revenue of $6.2 billion last year, vaulting sales of the combined organisation to $12.4 billion. Organon reported adjusted Ebitda of $1.9 billion which is marginally higher than Sun Pharma’s $1.8 billion in FY2025.

Sun plans to set up an Integration Management Office as it starts the acquisition process.

However, analysts raised concerns over Organon’s debt of $8.6 billion. Sun Pharma clarified that the acquisition will be funded through $2-2.5 billion of cash on hand and the balance of $9.25-$9.75 billion to be funded through committed financing from banks. Organon has a cash balance of $574 million.

“We’ve been either a low-debt or a cash-positive company for a long time. We will have the ability to do business development deals,” Shanghvi said about how the Organon debts will be repaid.

Early 2027 Close
Sun Pharma said the transaction is expected to close in early 2027, subject to customary conditions, including regulatory approvals and Organon stockholder approval.

Kirti Ganorkar, MD of Sun Pharma, said the company gets a global commercial presence and a global platform. “It also gives us entry in markets where we are not present today. It’s a transformative opportunity,” Ganorkar said.

Organon, however, has not grown over the last two years. Ganorkar said the company will look at line extensions of established brands from Organon, while building further on the opportunities in the biosimilars segment. He also asserted on in-licensing products.

Over half of Organon’s total sales, or roughly $3 billion, is drawn from established brands’ portfolios in high-value therapies including heart drugs, respiratory, bone and dermatology.

On the biosimilars business, Ganorkar said that about $320 billion worth of biologics is set to lose patents by 2035. “We can look at something like a $70 billion market opportunity,” he said.

Sun Pharma expects $350 million savings from synergies over a period of two to four years.

Leaders from the Indian pharma industry hailed the deal. GV Prasad, co-chairman, Dr. Reddy’s Labs, said this is a game-changing acquisition and “Sun is incredibly good as it once again demonstrated.”

Speaking to ET, Chairman of Zydus Lifesciences Pankaj Patel said, “I believe this is a positive development for Indian pharma on the global stage. India has truly arrived as a force shaping the future of healthcare, with organisations demonstrating the scale, capability and vision to drive meaningful change.”

“This development underscores India’s growing contributions to the advancement of global healthcare. We are very proud and heartily congratulate Dilipbhai and Sun Pharma on this development, which is a notable step for building globally competitive enterprises,” Patel added.