Sun Pharma has offered to acquire the pending stake in American pharmaceuticals company Taro Pharma for $38 per share, 31% higher than its current share price, according to a press release by Taro.

Taro Pharmaceutical Industries is an American pharmaceutical company headquartered in New York, USA. The company was established in 1950 in Israel as a manufacturer of pharmaceutical products. By 1984, the company had an operations center in Canada and entered the US market in 1988.

The company has three research centers located in Canada, Israel, and USA. Its product portfolio is mainly focused on pediatric liquids, capsules, tablets, creams, and ointments used for topical, dermatological, cardiovascular, anti-inflammatory, and neuropsychiatric purposes.

Sun Pharma, which currently owns 78.48% of Taro Pharma, has been an investor in the American pharmaceutical company since 2010. Sun Pharma has proposed to acquire the remaining 21.52% of Taro Pharma for $38 per share, 29% higher than the company’s latest closing price.

The proposed deal is an all-cash transaction where Sun Pharma will incorporate an SPV that would merge with Taro Pharma and cease to exist. This move would give Sun Pharma 100% ownership of Taro Pharmaceuticals. Subsequently, Taro Pharma would delist from the NYSE.

According to Taro Pharma, the offer is a “compelling liquidity opportunity” for its shareholders, and it has appointed an independent committee to evaluate the proposal.

Investors of the American pharmaceutical positively reacted to the news as the stock of Taro Pharma closed at $29.39 per share, up 1.5%. Moreover, the company’s shares grew 25% in after-hours trading.