Organon & Co. (NYSE:OGN) said on Sunday it signed a definitive agreement to be acquired by Sun Pharmaceutical Industries in an all-cash deal valued at $11.75 billion.

According to the terms of the agreement, Organon shareholders will receive $14 per share in cash, representing a 103% premium to Organon’s closing share price on April 9. The deal is expected to close in early 2027 if required approvals are secured.

The $11.75 Billion Acquisition

Organon, which ​was ​spun off from Merck & Co Inc. (NYSE:MRK) in 2021, sells more than 70 products across Women's Health and General Medicines, including biosimilars, and markets them in more than 140 countries.

The transaction was approved by the Boards of Directors of both Organon and Sun Pharma. Organon's portfolio, global reach, and strong stakeholder relationships are expected to complement Sun Pharma's existing strengths and further drive long-term value creation.

The proposed acquisition of Organon aligns with Sun Pharma’s strategy to enhance its global footprint, following a period of extensive due diligence that lasted over three months. It could be the largest overseas acquisition by an Indian pharmaceutical company, led by Dilip Shanghvi.

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Strategic Rationale for Sun Pharma

The Organon statement provided the Strategic Rationale for Sun Pharma. Following the successful completion of the transaction, Sun Pharma is poised to be a leading player in established brands and branded generics. The combined company would produce about $12.4 billion in revenue and rank among the top 25 global drugmakers.

Sun Pharma will emerge as an innovation-driven company, with 27% of revenue coming from innovative medicines and expand its footprint across 150 countries, including 18 major markets each generating over $100 million in revenue. It would become a top-three global player in global women’s health and the seventh-largest biosimilars company worldwide.

The combined company would be strong in cash generation, with EBITDA and cash flow set to almost double, supporting deleveraging from post-transaction net debt-to-EBITDA of 2.3x.

OGN is trending strongly across short, medium and long-term time frames, but carries a weak Momentum score, according to Benzinga Edge Stock Rankings. It has a good Value Score in the 46th percentile.

Price Action: Organon shares were up 16.8% on Robinhood’s 24-hour market after soaring about 31% on Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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