Organon Agrees to Pay Sun Pharma $120 Million Termination Fee

Sun Pharma to Acquire Organon & Co in $11.75 Billion Deal

US drugmaker Organon & Co has revealed that it will pay a termination fee of $120 million if the $11.75-billion deal with Sun Pharma is terminated. The Merger Agreement between the two companies outlines the circumstances under which the termination fee will be paid, including if Organon terminates the agreement to accept a Superior Proposal.

Sun Pharmaceutical Industries Ltd will acquire US-based Organon & Co in an all-cash deal at an enterprise valuation of $11.75 billion, one of the largest acquisitions by Indian firms overseas. Under the definitive agreement, Sun Pharma will acquire all outstanding shares of Organon for $14 per share, with an enterprise valuation of $11.75 billion.

Organon, a global healthcare company formed through a spinoff from Merck in 2021, has six manufacturing facilities across the European Union and emerging markets. The acquisition comes as Sun Pharma, India's biggest drugmaker by market value, steps up a push into higher-margin specialty medicines.

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Sun Pharma's acquisition of Organon will be among the top overseas acquisitions by Indian firms. The combined business is poised to be among the top 25 global pharmaceutical companies, with a combined revenue of $12.4 billion.

Sun Pharma Executive Chairman Dilip Shanghvi said the transaction represents a significant opportunity for the company to build on its vision of "reaching people and touching lives." The acquisition will also create a stronger and more diversified platform, with Organon's portfolio, capabilities, and global reach being highly complementary to Sun Pharma's.

Upon completion of the transaction, Sun Pharma will become a top-three company in global women's health and a 7th largest global biosimilar player. The combined business will have a presence in 150 countries, with 18 large markets, each generating over $100 million in revenues.

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The transaction has been approved by the boards of directors of both Sun Pharma and Organon and is expected to close in early 2027 subject to customary closing conditions. For Sun Pharma, the Organon acquisition is the latest in a series of successful acquisitions, including the $4 billion takeover of erstwhile Ranbaxy in 2014 and the acquisition of Israel's Taro Pharmaceutical Industries in a deal valued at $454 million in 2007.

Organon is a global leader in women's health, with a portfolio comprising over 70 products across women's health and general medicines. For the year ended December 31, 2025, Organon reported $6.2 billion in revenue and adjusted EBITDA of $1.9 billion. The company had debt of $8.6 billion and cash balance of $574 million.

Organon had recently closed on a divestiture of a product for which it received an upfront payment of $440 million, which will further contribute to its March 31, 2026 cash balance.