Sun Pharma to acquire Caraco's remaining stake

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Sun Pharmaceutical Industries and its subsidiaries are acquiring the remaining 24.2 per cent stake in US-based Caraco Pharmaceutical Laboratories.

Sun Pharma will pay $5.25 per share. This is $0.50 more than the proposed price of $4.75 a share, which Sun Pharma had offered its shareholders in its proposal to delist Caraco Pharma from stock exchange.

After acquiring Caraco Pharma in 1997, Sun Pharma has been increasing its stake upon completion of certain agreements between the two. In December, it told shareholders that it wanted to go private and offered $4.75 a share.

Sun Pharma shares today closed 2.92 per cent down at Rs 417.30 on the Bombay Stock Exchange.

The move came after the US Food and Drug Administration issued a warning for manufacturing practice violations at Caraco Pharma’s Cranbury facility in New Jersey in September last year.

The regulator had withheld approval of pending new drug applications of the company.

This was the second regulatory warning for Caraco Pharma.

In June 2009, Caraco’s Michigan facilities in Detroit, Farmington Hills, and Wixom were raided by US marshals and production was stopped for alleged breach of manufacturing regulations.