Dilip Shanghvi is going ahead with his biggest bet ever, by submitting a binding offer of $13 billion to acquire US-based Organon & Co, said people in the know, as part of an ambitious bid to transform Indian generics champion Sun Pharmaceutical into a global branded and innovative drugmaking powerhouse.
The largest Indian drug company by revenue and the most valuable, Sun Pharma is competing with Swedish buyout group EQT and German drugmaker Gruenthal, a specialist in pain management.
Sun’s final all-cash offer is fully financed by three global banks—JP Morgan, MUFG and Citi—to the tune of $12 billion. If Sun trumps competition, the plan is to merge NYSE-listed Organon with Sun. However, Organon’s shareholders will not receive any Sun Pharma shares. JP Morgan is also Sun's adviser. Organon’s stock price has zoomed nearly 52% in the past month as the buyout buzz around the company has intensified.
Earlier, its shares were down 19.06% after a brief spurt in January following news of Sun’s move on Organon becoming public. Its market cap is $2.4 billion, according to NYSE.
Sun Pharma closed Thursday with a market valuation of ₹4.03 lakh crore ($42.8 billion). The frenzy around the Organon stock has abruptly shifted attention away from its negatives–leveraged balance sheet and muted growth expectations— and to what a buyer might see in its portfolio, cash generation and carve-out value.
ET was the first to report on January 19 that Sun was scoping out Organon, a debt-ridden US company that specialises in women’s health that was spun off from MSD (Merck Sharp & Dohme) in 2021. On April 10, ET reported that Sun was preparing to make a final offer, sparking a 29% rally in the following session.
Sun Pharma and Organon didn’t respond to queries. EQT and Gruenthal declined to comment.
Buyers of Organon will have to refinance the debt it inherited from MSD. Organon ended 2025 with $8.64 billion in debt and guided for 2026 revenue of $6.125-6.325 billion, versus $6.43 billion reported for 2025.
Sun’s financing plan is predominantly aimed at taking on the debt. The Mumbai-headquartered company also has about $3.2 billion (₹26,000 crore) of net cash on its balance sheet that it plans to use to buy the equity of the target. The valuation is linked to the market cap plus premium, along with debt.
In recent months, Sun Pharma chairman Shanghvi has stressed the need for Indian drugmakers to pivot to innovative research for the next phase of growth while maintaining their lead in the generics business and, if necessary, consider acquisitions to build scale. In FY26, Sun Pharma clocked sales of ₹52,000 crore, with the US and India contributing almost an equal share of 31-33% while the rest was split up among other markets and active pharmaceutical ingredients (APIs).
The US company’s portfolio and prospects around women’s health--in areas such as breast cancer, contraception, osteoporosis and menopause --and biosimilars is attractive to suitors.
“Organon’s longer-term positioning remains strong, as women’s health growth rebounds and biosimilars become a more meaningful growth driver with recent portfolio expansion. The company also has a solid asset in VTAMA (skin medicine),” said Navann Ty, analyst at BNP Paribas. “A potential deal with Sun Pharma could be positive. On the other hand, we view a potential deal as negative for Sun Pharma, as it could be perceived as imprudent capital allocation, diverting focus from the specialty India business while adding leverage.”
The largest Indian drug company by revenue and the most valuable, Sun Pharma is competing with Swedish buyout group EQT and German drugmaker Gruenthal, a specialist in pain management.
Sun’s final all-cash offer is fully financed by three global banks—JP Morgan, MUFG and Citi—to the tune of $12 billion. If Sun trumps competition, the plan is to merge NYSE-listed Organon with Sun. However, Organon’s shareholders will not receive any Sun Pharma shares. JP Morgan is also Sun's adviser. Organon’s stock price has zoomed nearly 52% in the past month as the buyout buzz around the company has intensified.
Earlier, its shares were down 19.06% after a brief spurt in January following news of Sun’s move on Organon becoming public. Its market cap is $2.4 billion, according to NYSE.
Sun Pharma closed Thursday with a market valuation of ₹4.03 lakh crore ($42.8 billion). The frenzy around the Organon stock has abruptly shifted attention away from its negatives–leveraged balance sheet and muted growth expectations— and to what a buyer might see in its portfolio, cash generation and carve-out value.
ET was the first to report on January 19 that Sun was scoping out Organon, a debt-ridden US company that specialises in women’s health that was spun off from MSD (Merck Sharp & Dohme) in 2021. On April 10, ET reported that Sun was preparing to make a final offer, sparking a 29% rally in the following session.
Sun Pharma and Organon didn’t respond to queries. EQT and Gruenthal declined to comment.
Buyers of Organon will have to refinance the debt it inherited from MSD. Organon ended 2025 with $8.64 billion in debt and guided for 2026 revenue of $6.125-6.325 billion, versus $6.43 billion reported for 2025.
Sun’s financing plan is predominantly aimed at taking on the debt. The Mumbai-headquartered company also has about $3.2 billion (₹26,000 crore) of net cash on its balance sheet that it plans to use to buy the equity of the target. The valuation is linked to the market cap plus premium, along with debt.
In recent months, Sun Pharma chairman Shanghvi has stressed the need for Indian drugmakers to pivot to innovative research for the next phase of growth while maintaining their lead in the generics business and, if necessary, consider acquisitions to build scale. In FY26, Sun Pharma clocked sales of ₹52,000 crore, with the US and India contributing almost an equal share of 31-33% while the rest was split up among other markets and active pharmaceutical ingredients (APIs).
The US company’s portfolio and prospects around women’s health--in areas such as breast cancer, contraception, osteoporosis and menopause --and biosimilars is attractive to suitors.
“Organon’s longer-term positioning remains strong, as women’s health growth rebounds and biosimilars become a more meaningful growth driver with recent portfolio expansion. The company also has a solid asset in VTAMA (skin medicine),” said Navann Ty, analyst at BNP Paribas. “A potential deal with Sun Pharma could be positive. On the other hand, we view a potential deal as negative for Sun Pharma, as it could be perceived as imprudent capital allocation, diverting focus from the specialty India business while adding leverage.”
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