Sun Pharmaceutical Industries Ltd had completed the acquisition of a controlling stake in Taro Pharmaceutical Industries Ltd ending a three-year battle for control of the Israeli drug maker.

Sun's units have increased their economic interest in Taro to 48.7% and their voting rights to 65.8%.

The victory for Sun Pharma comes after a legal battle - in Israel and in U.S.- following Taro's termination in 2008 of a merger agreement signed between the two companies in 2007.

In connection with the closing of the Option Agreement, Sun and the members of the current Board of Directors of Taro, including members of the Levitt and Moros families, have settled all outstanding litigation among themselves.

Sun Pharma intend to build on Taro's market presence in U.S., Israel and Canada and its expertise in dermatology and pediatrics, along with specialty and generic pharmaceuticals, and over-the-counter products.

Sun Pharma's Chairman Dilip Shanghvi has been appointed to serve as chairman of the Taro board.

Transaction Reference: The Wall Street Journal

Early this month on Sept 8, Israeli Supreme Court ruled in favour of Sun Pharma by unanimously dismissing the appeal by Taro of the previous ruling by the Tel-Aviv District Court holding that the Israeli special tender offer (STO) rules do not apply to the Tender Offer by Sun’s subsidiary, Alkaloida Chemical Company Exclusive Group Ltd. (Alkaloida), to purchase all outstanding Ordinary Shares of Taro for $7.75 net per ordinary share in cash.

At that time, Sun Pharma had a 36% equity stake in Taro with 24% voting rights.

Sun Pharma had signed a $454 Mn merger agreement with Taro in 2007 including equity purchase of approximately $230 Mn at $7.75 per share in cash. However, in May 2008, Taro unilaterally terminated the agreement claiming lower valuations.

In 2008, Sun Pharma launched an open offer to acquire additional stake in Taro, which was challenged by the latter. Both companies then filed suits in Israeli and the US courts.

In a separate statement, Taro said its current board members were resigning and that appointees of Sun would become directors of Taro, effective immediately.

Taro has an established franchise in skin treatment products in the U.S, in addition to generic drugs to treat cardiovascular and neuro-psychiatric diseases and inflammation. It also has strategic sales and marketing operations in Israel and Canada.

Taro has factories in Canada and Israel that manufacture topical creams and ointments, liquids, capsules and tablets.

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