Taro employees join the takeover fray

The workers' committee requests a commitment in writing to project their jobs.

Staff at troubled pharmaceutical company Taro Pharmaceutical Industries (Pink Sheets: TAROF) have written to the company that could become their new employer, Indian drug company Sun Pharmaceutical Industries Ltd. (BSE: 524715), asking that it sign a memorandum of understanding (MOU) with them.

Writing in a letter sent yesterday to Sun chairman and CEO Dilip Shanghvi, the Taro workers' committee asked for an MOU with an undertaking to safeguard the jobs of all 650 employees at the Haifa plant for at least five years, rather than the two years that Sun is willing to commit to at present. The committee is also asking for severance pay at a rate of 250% of their salaries, should there be mitigating circumstances for job cuts.

The approach by Taro staff could change the picture for Sun, which has been trying to finalize its takeover of Taro for the last year and a quarter. The merger agreement between Taro and Sun stated explicitly that the company's employees were not unionized and were not governed by collective labor agreements.

Although Taro did not undertake in the merger agreement to prevent its employees from becoming unionized until the deal is closed, yesterday's letter could lead Sun to reconsider the merger.

Published by Globes [online], Israel business news - www.globes-online.com - on August 26, 2008

© Copyright of Globes Publisher Itonut (1983) Ltd. 2008

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