Sun Pharmaceutical Industries has announced the $11.75 billion acquisition of Organon & Co., marking the second-largest acquisition by an Indian company. The deal signals a shift in focus for Indian drugmakers, with the US generics market's allure beginning to fade. Instead, companies are eyeing newer markets such as China, South Korea, and Spain with branded generics.
The acquisition ranks as the second-largest acquisition by an Indian company, behind Tata Steel's 2007 deal to buy British steel maker Corus Group for $12 billion. Once the deal concludes, India's share in the combined $12.4 billion revenues of Sun Pharma-Organon drops to 17%, while the US accounts for 27%.
Industry experts and analysts say the real intent of the deal is to gain access to markets, portfolios, and new therapeutic segments beyond the US. The acquisition improves Sun's penetration into select large markets such as China and South Korea, and provides a ready-made platform to participate in China's growth.
The shift comes at a time when the US generics market is no longer the reliable growth engine it once was, due to pricing pressure, competition, and geopolitical risks. The era of frequent blockbuster patent expiries in small-molecule drugs is tapering off, and innovation is shifting toward biologics and specialty therapies.
