Sun's strong gravity helps India Inc's pull

Acquisition of New Jersey-headquartered drugmaker Organon pushes Sun Pharma further into the high-margin dermatology, oncology and obesity segments. This, apart from strengthening Sun's women's health portfolio and making an entry into biosimilars. It also opens up markets for branded speciality drugs in China, Brazil and other emerging regions where the Mumbai-HQed pharma giant has limited presence. The deal helps Sun offset changes in US tariff policies by keeping open the option of scaling up local manufacturing. The purchase is to be funded by Sun Pharma's strong balance sheet, and is expected to translate into earnings quickly for Organon.

India's largest overseas pharma acquisition ticks off three boxes in Sun's acquisition-led growth strategy: margin growth, market access and turnaround potential. Founder Dilip Shanghvi has made his company India's biggest drugmaker by value through carefully executed buyouts of Ranbaxy and Taro Pharmaceuticals, among others. This has helped focus Sun's portfolio on strong therapeutic segments that improved its regulatory compliance and drug development capability. Organon's portfolio of 70 drugs that are sold in about 140 countries should double the Indian company's global sales at healthy margins. Sun Pharma is facing intensifying competition in the US generics market, and Organon will offset this through its portfolio and market reach.

At $11.75 bn, the Sun-Organon deal ranks alongside some of India Inc's most ambitious overseas acquisitions such as Tata Steel's $12 bn takeover of Corus, Bharti Airtel's $10 bn purchase of Zain Africa, and Hindalco's buying of Novelis for $6 bn. Overall, large foreign acquisitions have been strategically successful, except when they are overfunded by debt. Outbound corporate acquisitions in 2025 have climbed to the highest in nearly a decade as Indian companies try to gain technology, brands and market access. This corporate trend should help balance India's trade with developed markets, particularly the sensitive US market.