Shares of Sun Pharma fell 4% as the company closed on its $12-billion acquisition of Organon. What is scaring investors?

Shares of Sun Pharmaceutical Industries fell over 4% on Friday to Rs. 1,643.60 after The Economic Times reported that the pharma company has submitted a binding offer of $12-billion for Organon & Co, entering the final stages of its most ambitious overseas acquisition bid yet.

The stock emerged as the top loser on the Sensex and Nifty as concerns intensified over the size of the proposed deal despite broader market strength.

Mumbai-based Sun Pharma has completed detailed due diligence lasting more than three months and is now finalizing the financing package before the firm submits an offer next week, ET reported, adding that at least three global banks were roped in last week to back the bid, which would be the biggest global M&A involving an Indian pharma major.

ET had first reported on January 19 that India’s largest drugmaker is evaluating the acquisition of Organon, a US company specializing in women’s health, to be spun off from MSD (Merck Sharp & Dohme) in 2021. Sun was negotiating the standard for JPMorgan, MUFG and Charternan. In January, Sun made a non-binding offer before starting due diligence.

“It has been hot and cold since January due to increased global volatility. But in the last 10 days, the sun has picked up its pace again,” said an executive familiar with the talks. “It’s a huge bet, and it only makes sense if you’re playing to win at such an advanced stage.”

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Shares of Organon are down 19.06% year to date following a brief bounce in January after news of Sun’s bid became public. Organon has been on Sun Pharma’s radar for some time, but a serious evaluation began last November when the US company decided to sell its JADA post-partum hemorrhage (PPH) treatment system to Labor Medical for up to $465 million as it sought to pivot from women’s health devices to renew its focus on women’s health range Biopharma.

Debt to Organisations, Intense Competition

Organ inherited $9.5 billion in debt during the MSD spinoff and is facing intense competitive pressure from global drugmakers as well as generic suppliers in all three of its broad business segments – women’s health, biosimilars and established product lines, including cardiovascular drugs, respiratory and health pain, non-operative.

Recent data shows that Organon has reduced its debt to $8 billion in calendar 2025. In comparison, Sun has about $3.2 billion (Rs 26,000 crore) of net cash on its balance sheet. Management has said it is willing to use this to fund major acquisitions. In FY26, Sun Pharma reported Rs. 52,000 crore in sales – the US and India accounted for roughly 31-33% each. The rest is split between other markets and active pharmaceutical ingredients (APIs).

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Last year, Sun Pharma acquired Checkpoint Therapeutics for $355 million upfront, valuing the deal at $416 million. This gave Sun Pharma access to the anti-cancer drug Unloxcyt. Sales of its 11 innovative drugs generated $1.21 billion in the US. These include ophthalmology, hair loss, dermatology and anti-cancer drugs. Sun Pharma’s biggest new drug in the US to treat plaque psoriasis is Illumya, which had sales of $681 million last year.

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