Sun Pharmaceutical Industries on Thursday said it will acquire the remaining 21.52 per cent stake in Israel-based Taro Pharmaceutical Industries for Rs 2,891.76 crore, enabling the merger of the two entities.

Founded by Dalip Shanghvi, Sun Pharma will spend $43 per share amounting to $347.73 million for 8.08 million shares (Rs 2,891.76 crore) as per the current exchange rate.

The stock markets gave a thumbs-up to the proposed transaction, with Sun Pharma the top gainer in the Sensex pack on Thursday, up 2.80 per cent or Rs 36.40 at Rs 1,335.65.

"Over the years, with Sun Pharma's strategic interventions, Taro has remained a key player in the generic dermatology market in a challenging environment," Sun Pharma MD Dilip Shanghvi said.

The combined entity will leverage its global strengths and capabilities to better serve the needs of patients and healthcare professionals, Shanghvi said.

After the merger, Taro will become a privately held company — the deal is expected to close in the first half of 2024 — and its shares will no longer be listed on the NYSE.

Taro develops proprietary and off-patent pharmaceuticals for markets in the US, Canada, Israel and other countries. It posted a turnover of Rs 4,604.25 crore in 2022-23.

"Taro is committed to delivering high-quality products to our patients and customers around the world. This merger will further enable us to compete effectively in our products and markets," Taro CEO Uday Baldota said.

The merger was unanimously recommended by the Special Committee, formed by Taro's board to consider Sun Pharma's proposal.

Taro's audit committee also recommended the merger unanimously, following which approvals came from the boards of the two companies.

Sun Pharma has been looking to gain full control of Taro for some time. In May, it had proposed to acquire all the outstanding shares at $38 per share. Subsequently, in December it revised the price upwards to $43 per share.