India-based Sun Pharmaceutical Industries Ltd is reportedly exploring a significant acquisition of Organon & Co, a U.S.-based women’s healthcare firm. If finalized, this acquisition could mark the largest cross-border deal ever by an Indian pharmaceutical company, according to sources cited by The Economic Times. Sun Pharma has made a non-binding all-cash bid and has secured $10–14 billion in financing for the potential deal.
The transaction, valued at approximately $10 billion including debt, would represent Sun Pharma’s largest acquisition to date. This would also be its most ambitious move into international markets since acquiring Ranbaxy Laboratories Ltd. A source described the potential deal as “transformative,” emphasizing that it would significantly enhance Sun Pharma’s presence in the U.S. market, particularly in the sectors of women’s health and biosimilars.
Organon, which was spun off from Merck & Co in 2021, currently carries around $8.9 billion in debt. Since its separation, the company has been pursuing growth through acquisitions and asset sales to streamline its balance sheet. Notably, in September 2024, Organon acquired Dermavant Sciences for $1.2 billion and recently sold its JADA postpartum hemorrhage system for $465 million as a part of its strategy to divest non-core assets.
Current Status of Negotiations
While discussions are ongoing, they remain in preliminary stages, and there is no guarantee that a final agreement will be reached. Sources close to the matter have revealed that Sun Pharma has engaged a European bank to assist in structuring a financial proposal for Organon’s board. Previously, talks had stalled due to valuation concerns after Organon’s stock price halved.
It is currently uncertain whether Sun Pharma will pursue an all-cash offer or a combination of cash and stock. Analysts have pointed out that a bidding war could emerge, given the interest in Organon. If the acquisition proceeds, the combined entity would operate with a pro forma leverage of approximately 2.5 times net debt to EBITDA.
Organon’s Financial Performance
In its latest financial report, Organon posted third-quarter adjusted earnings of $1.01 per share, exceeding analyst expectations of $0.94. Sales increased by 1% to $1.60 billion, surpassing projections of $1.58 billion. However, the company reduced its fiscal 2025 sales guidance, now forecasting between $6.20 billion and $6.25 billion, below the consensus estimate of $6.289 billion.
One of Organon’s flagship products, Nexplanon, a contraceptive implant, continues to drive sales. Recently, the U.S. Food and Drug Administration (FDA) approved a supplemental New Drug Application for Nexplanon, extending its usage duration from three to five years. This approval also includes a new Risk Evaluation and Mitigation Strategy (REMS) program aimed at mitigating complications related to improper insertion and removal.
As of the latest reports, Organon shares rose by 4.68% to $9.17, reflecting investor interest amid the ongoing acquisition discussions. The developments surrounding this potential deal could reshape the landscape of the global pharmaceutical industry, particularly in the women’s healthcare segment.
