TARO Taro Pharmaceutical Industries Ltd

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13E-3

(Amendment No. 1)

RULE 13e-3 TRANSACTION STATEMENT UNDER SECTION 13(e)

OF THE SECURITIES EXCHANGE ACT OF 1934

Taro Pharmaceutical Industries Ltd.

(Name of the Issuer)

Taro Pharmaceutical Industries Ltd.

Sun Pharmaceutical Industries Ltd.

Alkaloida Chemical Company ZRT

The Taro Development Corporation

Sun Pharma Holdings

Libra Merger Ltd.

(Name of Person(s) Filing Statement)

Ordinary Shares, nominal (par) value NIS 0.0001 per share

(Title of Class of Securities)

M8737E108

(CUSIP Number of Class of Securities)

(Name, Address, and Telephone Numbers of Person Authorized to Receive Notices and Communications on Behalf of the Person(s) Filing Statement)

With Copies to:

This statement is filed in connection with (check the appropriate box):

Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: ☐

Check the following box if the filing is a final amendment reporting the results of the transaction: ☐

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THIS TRANSACTION, PASSED UPON THE MERITS OR FAIRNESS OF THIS TRANSACTION, OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS TRANSACTION STATEMENT ON SCHEDULE 13E-3. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

INTRODUCTION

This Amendment No. 1 to the Rule 13e-3 transaction statement on Schedule 13E-3, together with the exhibits hereto (as amended hereby, this “Schedule” or “Transaction Statement”), is being filed with the Securities and Exchange Commission (the “SEC”) pursuant to Section 13(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), jointly by the following persons (each, a “Filing Person,” and collectively, the “Filing Persons”): (a) Taro Pharmaceutical Industries Ltd., an Israeli company (“Taro” or the “Company”) and the issuer of the ordinary shares, nominal (par) value NIS 0.0001 per share (the “Ordinary Shares”), that is subject to the transaction pursuant to Rule 13e-3 under the Exchange Act; (b) Sun Pharmaceutical Industries Limited, a corporation organized under the laws of India (“Sun Pharma”); (c) Alkaloida Chemical Company Zrt., a corporation organized under the laws of Hungary and under the control of Sun Pharma (“Alkaloida”); (d) The Taro Development Corporation, a corporation organized under the laws of New York and under the control of Sun Pharma (“TDC”); (e) Sun Pharma Holdings, a corporation organized under the laws of Mauritius and a direct wholly owned subsidiary of Sun Pharma (“SPH”); and (f) Libra Merger Ltd., an Israeli company under the control of Sun Pharma and a direct wholly owned subsidiary of Alkaloida, TDC and SPH (“Merger Sub”).

This Schedule relates to the Agreement of Merger, dated as of January 17, 2024 (the “Merger Agreement”), by and among Sun Pharma, Alkaloida, TDC, SPH, Merger Sub (collectively, the “Sun Pharma Entities”) and Taro. Pursuant to the Merger Agreement, and upon the terms and subject to the conditions thereof, Merger Sub will be merged with and into Taro (the “Merger”), and each outstanding Ordinary Share (other than such shares held by Sun Pharma and its affiliates or Taro and subsidiaries of Taro) will be converted into the right to receive $43.00 in cash, without interest and subject to any applicable withholding taxes. Sun Pharma, Alkaloida, TDC, and SPH expect to fund the aggregate merger consideration and all related fees and expenses with cash or cash equivalents on hand. The Merger remains subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement. In order for the Merger to be completed, the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement (the “Transactions”) must be approved by (a) the affirmative vote of at least 75% of the total voting power of Taro present (in person or by proxy) and voting at the extraordinary general meeting, including at least a majority of the total voting power held by holders other than Sun Pharma and its affiliates, their relatives, persons voting on their behalf or any other holders having a personal interest (under the Israeli Companies Law 5759-1999, as amended, and all rules and regulations promulgated thereunder) in the Merger (the “Interested Shareholders”) and voting thereon, unless the total voting power held by Taro shareholders other than the Interested Shareholders (the “Minority Shareholders”) and voting against the merger does not exceed 2% of the total voting power of the Company; (b) the affirmative vote of at least 75% of the Taro ordinary shares present (in person or by proxy) and voting at the ordinary class meeting; and (c) the affirmative vote of at least 75% of the founders’ shares of Taro (the “Founder Shares”) present (in person or by proxy) and voting at the founders class meeting.

Sun Pharma, Alkaloida, TDC, SPH and their respective Affiliates have agreed to vote or cause to be voted any and all Ordinary Shares and Founder Shares (a) beneficially owned by Sun Pharma, Alkaloida, TDC, SPH or their respective Affiliates or (b) with respect to which they have the power (by agreement, proxy or otherwise) to cause to be voted in favor of the approval of the Transactions (and at any adjournments or postponements thereof) and to cause their personal interest in such vote to be duly disclosed to the Company.

Upon completion of the Merger, the Company will become a privately-held company, the Company’s obligations to file periodic reports under the Exchange Act will be terminated and its Ordinary Shares will no longer be listed on the New York Stock Exchange.

Taro will mail a proxy statement (the “Proxy Statement”) relating to (a) the extraordinary general meeting of Taro shareholders, (b) the general meeting of holders of Ordinary Shares and (c) the class meeting of the holders of the Founder Shares, at which the shareholders of Taro will consider and vote upon a proposal to approve the terms of the Transactions contemplated by the Merger Agreement. A copy of the Proxy Statement is attached hereto as Exhibit (a)(3)(i) and a copy of the Merger Agreement is attached as Appendix A to the Proxy Statement.

The cross-references below are being supplied pursuant to General Instruction G to Schedule 13E-3 and show the location in the Proxy Statement of the information required to be included in response to the Items of Schedule 13E-3. Pursuant to General Instruction F to Schedule 13E-3, the information contained in the Proxy Statement, including all annexes thereto, is incorporated in its entirety herein by this reference, and the responses to each item in this Transaction Statement are qualified in their entirety by the information contained in the Proxy Statement and the annexes thereto. As of the date hereof, the Proxy Statement is in preliminary form and is subject to completion. Capitalized terms used but not defined in this Schedule shall have the meanings given to them in the Proxy Statement.

1

The information contained in this Schedule and/or the Proxy Statement concerning (i) Taro was supplied by Taro and no other Filing Person takes responsibility for the accuracy of such information and (ii) each other Filing Person was supplied by such Filing Person and no other Filing Person (including Taro) takes responsibility for the accuracy of such information nor any other information not supplied by such Filing Person.

Item 1. Summary Term Sheet

The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

Item 2. Subject Company Information

The exact title of the subject class of equity securities is ordinary shares, with nominal (par) value NIS 0.0001 per share.

Item 3. Identity and Background of Filing Person(s)

2

Item 4. Terms of the Transaction

Item 5. Past Contacts, Transactions, Negotiations and Agreements

3

Item 6. Purposes of the Transaction and Plans or Proposals

4

Item 7. Purposes, Alternatives, Reasons and Effects of the Transaction

Item 8. Fairness of the Transaction

5

Item 9. Reports, Opinions, Appraisals and Certain Negotiations

Item 10. Source and Amounts of Funds or Other Consideration

Item 11. Interest in Securities of the Subject Company

6

Item 12. The Solicitation or Recommendation

Item 13. Financial Information

The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

Item 14. Persons/Assets Retained, Employed, Compensated or Used

7

Item 15. Additional Information

Item 16. Exhibits

The following exhibits are filed herewith:

8

After due inquiry and to the best of their knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: March 11, 2024

9

Exhibit (a)(3)(i)

**PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION**

TARO PHARMACEUTICAL INDUSTRIES LTD.

14 Hakitor Street

Haifa Bay 2624761, Israel

Telephone: +972 4 8475600

Dear Shareholder:

You are cordially invited to attend an extraordinary general meeting of the shareholders (which we refer to as the “extraordinary general meeting”) of Taro Pharmaceutical Industries Ltd. (which we refer to as the “Company” or “Taro”) and the class meeting (which we refer to as the “ordinary class meeting” and together with the extraordinary general meeting, the “meetings”) of the holders of the Company’s ordinary shares, nominal value NIS 0.0001 per share of Taro (which we refer to as the “ordinary shares”) to be held virtually via live webcast on    , 2024, at 10:00 a.m., Israel time, and    , 2024, at 11:00 a.m., Israel time, or immediately after the conclusion of the extraordinary general meeting, whichever is later, respectively, and in person at Meitar Law Offices located at 16 Abba Hillel Road, 10^th Floor, Ramat Gan, Israel. Following the ordinary class meeting, a class meeting of the holders of the Company’s founders’ shares (which we refer to as the “founders class meeting” and together with the ordinary class meeting, the “class meetings”) will be held. At the meetings, you will be asked to consider and vote on the approval, pursuant to Section 320 of the Companies Law, 5759-1999 of the State of Israel (which, together with the regulations promulgated thereunder, we refer to as the “Companies Law”), of the merger of Taro with Libra Merger Ltd., a company formed under the laws of the State of Israel (which we refer to as “Merger Sub”), under the control of Sun Pharmaceutical Industries Limited, a corporation organized under the laws of India (which we refer to as “Sun Pharma”), and a direct, wholly owned subsidiary of Alkaloida Chemical Company ZRT (f/k/a Alkaloida Chemical Company Exclusive Group Limited), a company formed under the laws of Hungary (which we refer to as “Alkaloida”), The Taro Development Corporation, a company formed under the laws of New York (which we refer to as “TDC”), and Sun Pharma Holdings, a corporation formed under the laws of Mauritius (which we refer to as “SPH”), including approval of: (i) the Agreement of Merger, dated as of January 17, 2024, by and among Sun Pharma, Alkaloida, Merger Sub, TDC, SPH (which we collectively refer to as the “Sun Pharma Entities”) and Taro (which we refer to as the “merger agreement”); (ii) the merger transaction pursuant to Sections 314 through 327 of the Companies Law, whereby Merger Sub will merge with and into Taro, with Taro surviving and becoming an indirect wholly owned subsidiary of Sun Pharma and its affiliates (which we refer to as the “merger”); and (iii) all other transactions contemplated by the merger agreement (which we refer to, collectively, as the “Transactions”). A copy of the merger agreement is attached as Appendix A to the accompanying proxy statement.

If the merger is completed, the Minority Shareholders (as defined below) of the Company will receive $43.00 in cash (which we refer to as the “merger consideration”), without any interest thereon, subject to the withholding of any applicable taxes, for each ordinary share, held as of immediately prior to the effective time of the merger.

As of     , 2024, the closing per share price of the ordinary shares on the New York Stock Exchange (which we refer to as the “NYSE”) was $    . Shareholders of Taro selling ordinary shares in the market may be able to obtain a per share price that is higher than the merger consideration for some or all of their ordinary shares.

Your vote is very important, regardless of the number of ordinary shares you own. Under the Companies Law and pursuant to the organizational documents of Taro, the Transactions must be approved by (a) the affirmative vote of at least 75% of the total voting power of Taro present (in person or by proxy) and voting at the extraordinary general meeting, including at least a majority of the total voting power held by holders other than Sun Pharma and its affiliates, their relatives, persons voting on their behalf or any other holders having a personal interest (under the Israeli Companies Law 5759-1999, as amended, and all rules and regulations promulgated thereunder) in the Merger (which we refer to as the “Interested Shareholders”) and voting thereon, unless the total voting power held by Taro shareholders other than the Interested Shareholders (which we refer to as the “Minority Shareholders”) and voting against the merger does not exceed 2% of the total voting power of the Company; (b) the affirmative vote of at least 75% of the Taro ordinary shares present (in person or by proxy) and voting at the ordinary class meeting; and (c) the affirmative vote of at least 75% of the founders’ shares of Taro (which we refer to as the “Founder Shares”) present (in person or by proxy) and voting at the founders class meeting.

For purposes of determining whether a Taro shareholder is considered to have a personal interest in the merger as described in (B) of the preceding paragraph, the term “personal interest” is defined as: (1) a Taro shareholder’s personal interest in the approval of the Transactions, including (i) the personal interest of his or her relative; and (ii) a personal interest of a body corporate in which a shareholder or any of his/her relatives serves as a director or the chief executive officer, owns at least 5% of its issued share capital or its voting rights or has the right to appoint a director or chief executive officer, but (2) excluding a personal interest arising solely from the fact of holding shares in Taro. The term “relative” is defined as a spouse, sibling, parent, grandparent, descendant, spouse’s descendant, sibling or parent and the spouse of any of the foregoing.

Record holders of our outstanding ordinary shares as of the close of business in New York City on    , 2024, the record date, are entitled to notice of and to one vote at the meetings or any adjournment or postponement thereof per ordinary share held. Each of Sun Pharma, Alkaloida, TDC and SPH has agreed to vote or cause to be voted in favor of the Transactions all of the ordinary shares it beneficially owns and has the power to vote or cause to be voted, equal to approximately 78.5% of the issued and outstanding ordinary shares and all of the Founder Shares beneficially owned by each of them (which constitute 100% of the Founder Shares), which together represent approximately 85.7% of the aggregate voting power of Taro.

After careful consideration, and upon the unanimous recommendation of the special committee (which we refer to as the “Special Committee”) of our board of directors (which we refer to as the “Board”), composed entirely of independent directors of the Board, the Special Committee determined that the Transactions are advisable and fair to, and in the best interests of, the Minority Shareholders, and Taro’s audit committee of the Board (which we refer to as the “Audit Committee”) determined that the Transactions are advisable and fair to, and in the best interests of, Taro and its shareholders. The Special Committee and the Audit Committee each approved and recommended to the Board the approval of the Transactions. Our Board has (i) upon such recommendations, (a) determined that the merger is advisable and fair to, and in the best interests of, Taro and its shareholders, (b) approved the Transactions and (c) determined to recommend to the shareholders of Taro the approval of the Transactions and (ii) determined that, considering the financial position of the merging companies, no reasonable concern exists that the surviving company in the merger (the “Surviving Company”) will be unable to fulfill the obligations of Taro to its creditors.

To vote your shares, you may use the enclosed proxy card or vote via telephone or by visiting www.    , or attend the meetings in person, or both. On behalf of the Board, I urge you to sign, date and return the enclosed proxy card or vote via telephone or by visiting www.    , as soon as possible, even if you currently plan to attend the meetings. It is important that your shares be represented and voted at the meetings. If you attend the meetings, you may vote in person if you wish, even though you have previously returned your proxy card or voted via telephone or by visiting www.    . If you have any questions, please feel free to contact MacKenzie Partners, Inc., our proxy solicitor, toll-free at (800) 322-2885 (from the United States and Canada) or collect at (212) 929-5500 (from other locations). Banks and brokers may call (212) 929-5500.

The enclosed proxy statement provides you with detailed information about the Transactions. In addition, you may obtain information about Taro from documents filed with the United States Securities and Exchange Commission. We encourage you to read the entire proxy statement carefully.

Thank you for your support of Taro.

Sincerely,

Dilip Shanghvi

Chairman of the Board of Directors

Taro Pharmaceuticals Industries Ltd.

**PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION**

TARO PHARMACEUTICAL INDUSTRIES LTD.

14 Hakitor Street

Haifa Bay 2624761, Israel

Telephone: +972 4 8475600

NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS

AND CLASS MEETING OF THE HOLDERS OF ORDINARY SHARES

AND CLASS MEETING OF THE HOLDERS OF FOUNDERS’ SHARES

TO BE HELD ON [    ], 2024

To our Shareholders:

Notice is hereby given that an extraordinary general meeting of the shareholders (which we refer to as the “extraordinary general meeting”) of Taro Pharmaceutical Industries Ltd. (which we refer to as the “Company” or “Taro”) and the class meeting (which we refer to as the “ordinary class meeting” and together with the extraordinary general meeting, the “meetings”) of the holders of the Company’s ordinary shares, nominal value NIS 0.0001 per share of Taro (which we refer to as the “ordinary shares”) to be held virtually via live webcast on    , 2024, at 10:00 a.m., Israel time, and     , 2024, at 11:00 a.m., Israel time, or immediately after the conclusion of the extraordinary general meeting, whichever is later, respectively, and in person at Meitar Law Offices located at 16 Abba Hillel Road, 10^th Floor, Ramat Gan, Israel. Following the ordinary class meeting, a class meeting of the holders of the Company’s founders’ shares (which we refer to as the “founders class meeting” and together with the ordinary class meeting, the “class meetings”) will be held. At the meetings, you will be asked to consider and vote on the approval, pursuant to Section 320 of the Companies Law, 5759-1999 of the State of Israel (which we refer to, together with the regulations promulgated thereunder, as the “Companies Law”), of the merger of Taro with Libra Merger Ltd., a company formed under the laws of the State of Israel (which we refer to as “Merger Sub”), under the control of Sun Pharmaceutical Industries Limited, a corporation organized under the laws of India (which we refer to as “Sun Pharma”), and a direct, wholly owned subsidiary of Alkaloida Chemical Company ZRT (f/k/a Alkaloida Chemical Company Exclusive Group Limited), a company formed under the laws of Hungary (which we refer to as “Alkaloida”), The Taro Development Corporation, a company formed under the laws of New York (which we refer to as “TDC”), and Sun Pharma Holdings, a corporation formed under the laws of Mauritius (which we refer to as “SPH”), including approval of: (i) the Agreement of Merger, dated as of January 17, 2024, by and among Sun Pharma, Alkaloida, Merger Sub, TDC, SPH (which we refer to collectively as the “Sun Pharma Entities”) and Taro (which we refer to as the “merger agreement”); (ii) the merger transaction pursuant to Sections 314 through 327 of the Companies Law, whereby Merger Sub will merge with and into Taro, with Taro surviving and becoming an indirect wholly owned subsidiary of Sun Pharma and its affiliates (which we refer to as the “merger”); and (iii) all other transactions contemplated by the merger agreement (which we refer to, collectively, as the “Transactions”). A copy of the merger agreement is attached as Appendix A to the accompanying proxy statement.

If the merger is completed, the Minority Shareholders (as defined below) of the Company will receive $43.00 in cash (which we refer to as the “merger consideration”), without any interest thereon, subject to the withholding of any applicable taxes, for each ordinary share held as of immediately prior to the effective time of the merger. As of     , 2024, the closing per share price of the ordinary shares on the New York Stock Exchange (which we refer to as the “NYSE”) was $    . Shareholders of Taro selling ordinary shares in the market may be able to obtain a per share price that is higher than the merger consideration for some or all of their ordinary shares.

The Transactions are described more fully in the attached proxy statement, which we urge you to read in its entirety.

Only Taro shareholders of record as of the close of business in New York City on    , 2024, the record date, are entitled to notice of and to vote at the meetings or any adjournment or postponement thereof. Holders of the Company’s ordinary shares are not entitled to appraisal rights under Israeli law.

Discussion at each of the meetings will commence if a quorum is present. A quorum for each of the meetings is constituted by three or more Taro shareholders who are present in person or by proxy, or who have delivered to the Company a proxy card or voted via telephone or by visiting www.    , indicating their manner of voting, holding among them a number of shares entitling them to one-third of the voting power of Taro or such class of Taro shares. If a quorum is not present within half an hour of the time designated for each of the meetings, the meetings will be adjourned until    , 2024, at the same time and place. At any adjourned meeting, any two Taro shareholders who are present in person or proxy, who have delivered a proxy card or voted via telephone or by visiting www.    , will constitute a quorum.

Your vote is very important, regardless of the number of ordinary shares you own. Under the Companies Law and pursuant to the organizational documents of Taro, the Transactions must be approved by (a) the affirmative vote of at least 75% of the voting power of Taro present (in person or by proxy) and voting at the extraordinary general meeting, including at least a majority of the voting power held by holders other than Sun Pharma and its affiliates, their relatives, persons voting on their behalf or any other holders having a personal interest (under the Israeli Companies Law 5759-1999, as amended, and all rules and regulations promulgated thereunder) in the Merger (the “Interested Shareholders”) and voting thereon unless the total voting power held by Taro shareholders other than the Interested Shareholders (the “Minority Shareholders”) and voting against the merger does not exceed 2% of the total voting power of the Company; (b) the affirmative vote of at least 75% of the ordinary shares present (in person or by proxy) and voting at the ordinary class meeting; and (c) the affirmative vote of at least 75% of the founders’ shares (the “Founder Shares”) present (in person or by proxy) and voting at the founders class meeting.

For purposes of determining whether a Taro shareholder is considered to have a personal interest in the merger as described in (B) of the preceding paragraph, the term “personal interest” is defined as: (1) a Taro shareholder’s personal interest in the approval of the Transactions, including (i) the personal interest of his or her relative; and (ii) a personal interest of a body corporate in which a Taro shareholder or any of his/her relatives serves as a director or the chief executive officer, owns at least 5% of its issued share capital or its voting rights or has the right to appoint a director or chief executive officer, but (2) excluding a personal interest arising solely from the fact of holding shares in Taro. The term “relative” is defined as: a spouse, sibling, parent, grandparent, descendant, spouse’s descendant, sibling or parent and the spouse of any of the foregoing.

Record holders of our outstanding ordinary shares as of the close of business in New York City on    , 2024, the record date, are entitled to notice of, and one vote at the meetings or any adjournment or postponement thereof per ordinary share held. Each of the Sun Pharma Entities has agreed to vote or cause to be voted in favor of the Transactions all of the ordinary shares they beneficially own and have the power to vote or cause to be voted, equal to approximately 78.5% of the issued and outstanding ordinary shares and all of the Founder Shares beneficially owned by them (which constitute 100% of the Founder Shares), which together represent approximately 85.7% of the aggregate voting power of Taro.

All Taro shareholders are cordially invited to attend the meetings in person. Even if you plan to attend in person, we request that you complete, sign, date and return the enclosed proxy, or vote via telephone or by visiting www.    , by no later than by 10:00 a.m., Israel time, on    , 2024, and thus ensure that your shares will be represented at the meetings if you are unable to attend. If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” the proposal to approve the Transactions. If you fail to return your proxy card, your shares will not be counted for the purposes of determining whether a quorum is present at the meetings.

Every Taro shareholder voting at the meetings, or prior thereto by means of the enclosed proxy card, is requested to notify Taro whether or not such shareholder is an Interested Shareholder. If you do not confirm whether or not you are an Interested Shareholder, your vote will not count towards either the ordinary majority or the special tally required for approval of the Transactions.

The Company will retain a nationally recognized independent inspector of elections to tabulate the vote and to determine the vote of the disinterested Taro shareholders.

Whether or not you plan to attend the meetings, please take the time to vote your shares by completing, signing and promptly mailing the enclosed proxy card to us in the enclosed, postage-paid envelope, or vote via telephone or by visiting www.    . If you do attend the meetings, you may vote in person, whether or not you have already signed and returned your proxy card, or voted via telephone or by visiting www.    . You may change or revoke your proxy at any time before it is voted. Please review the proxy statement accompanying this notice for more complete information regarding the meetings and the matters proposed for your consideration at the meetings.

By order of the Board of Directors,

Dilip Shanghvi

Chairman of the Board of Directors

Taro Pharmaceuticals Industries Ltd.

Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the Transactions, passed upon the merits or fairness of the Transactions or passed upon the adequacy or accuracy of the disclosure in the proxy statement. Any representation to the contrary is a criminal offense.

TABLE OF CONTENTS

**PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION**

TARO PHARMACEUTICAL INDUSTRIES LTD.

EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS

AND CLASS MEETING OF THE HOLDERS OF ORDINARY SHARES

TO BE HELD ON [    ]

PROXY STATEMENT

This proxy statement contains information relating to the extraordinary general meeting of the shareholders of Taro and the class meeting of the holders of Taro’s ordinary shares. We are furnishing this proxy statement to shareholders of Taro as part of the solicitation of proxies by Taro’s board of directors for use at the extraordinary general meeting and class meeting of the holders of Taro’s ordinary shares. This proxy statement is dated    and is first being mailed to shareholders of Taro on or about    .

SUMMARY

This summary highlights selected information from this proxy statement related to the merger and may not contain all of the information that is important to you. We have included page references in parentheses to direct you to more complete descriptions of the topics presented in this summary term sheet. To understand the merger fully and for a more complete description of the legal terms of the merger, you should carefully read this entire proxy statement and the documents we refer to herein, as they contain important information about, among other things, the merger and how it affects you. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions in the section of this proxy statement entitled “Where You Can Find More Information.” A copy of the merger agreement is attached as Appendix A to this proxy statement. You should carefully read and consider the entire merger agreement, which is the legal document that governs the merger.

Except as otherwise specifically noted in this proxy statement, “Taro,” “we,” “our,” “us,” the “Company” and similar words refer to Taro Pharmaceutical Industries Ltd. Throughout this proxy statement, we refer to Sun Pharmaceutical Industries Limited as “Sun Pharma,” Libra Merger Ltd. as “Merger Sub,” Alkaloida Chemical Company ZRT (f/k/a Alkaloida Chemical Company Exclusive Group Limited) as “Alkaloida”, The Taro Development Corporation as “TDC”, and Sun Pharma Holdings as “SPH” and Sun Pharma, Merger Sub, Alkaloida, TDC and SPH each as a “party” and together as the “parties.” In addition, throughout this proxy statement we refer to the Agreement of Merger, dated as of January 17, 2024 (as it may be amended from time to time), by and among Taro, Sun Pharma, Merger Sub, Alkaloida, TDC and SPH, as the “merger agreement”; our ordinary shares, nominal value NIS 0.0001 per share, as “ordinary shares”; and the holders of ordinary shares of Taro as “Taro shareholders.” Unless indicated otherwise, any other capitalized term used herein but not otherwise defined herein has the meaning assigned to such term in the merger agreement.

Parties Involved in the Merger (Page 75)

Taro Pharmaceutical Industries Ltd. (“Taro” or the “Company”)

1

14 Hakitor Street

Haifa Bay 2624761, Israel

Telephone: +972 4 8475600

Taro is a multinational, science-based pharmaceutical company, operating primarily in the United States, Canada and Israel, through three entities: (i) Taro Israel, and two of its subsidiaries, (ii) Taro Pharmaceuticals Inc. (Taro Israel’s direct Canadian subsidiary) and (iii) Taro Pharmaceuticals U.S.A., Inc. (Taro Israel’s indirect subsidiary). Operating in an intensely competitive pharmaceutical industry, the Company develops, manufactures and markets generic and branded prescription and over-the-counter pharmaceutical products. Taro competes with the original manufacturers of the brand-name, other generic drug manufacturers and manufacturers of new drugs that may compete with the Company’s generic drugs. Many of Taro’s competitors have greater financial, production and research and development resources, substantially larger sales and marketing organizations, and substantially greater name recognition. See “The Companies—Taro.”

Sun Pharmaceutical Industries Ltd. (“Sun Pharma”)

Registered Office: SPARC, Tandalja,

Vadodara—390 012, Gujarat, INDIA

Corporate Office: Sun House, Plot No. 201 B/1,

Western Express Highway, Goregaon (E),

Mumbai 400063, Maharashtra, India

+9122 4324 4324

The legal and commercial name of Sun Pharma is Sun Pharmaceutical Industries Limited. Sun Pharma is an international, integrated, specialty pharmaceutical company. It manufactures and markets a large basket of bulk drugs (APIs) and pharmaceutical formulations as branded generics as well as generics in India, the U.S. and several other markets across the world. In India, the company is a leader in the niche therapy areas of psychiatry, neurology, cardiology, diabetology, gastroenterology and orthopedics. Sun Pharma’s principal executive offices are located at Sun House, Plot No. 201 B/1 Western Express Highway, Goregaon East, Mumbai, Maharashtra, India—400 063, and its telephone number at such address is +9122 4324 4324.

Alkaloida Chemical Company ZRT (“Alkaloida”)

Kabay János u. 29

H-4440 Tiszavasvari,

Hungary

Telephone: +3648521004

The legal and commercial name of Alkaloida is Alkaloida Chemical Company ZRT (f/k/a Alkaloida Chemical Company Exclusive Group Ltd.). Alkaloida is an indirect subsidiary of Sun Pharma. Alkaloida’s principal executive offices are located at Kabay János u. 29, H-4440 Tiszavasvari, Hungary, and the telephone number at such address is +3648521004.

The Taro Development Corporation (“TDC”)

c/o Taro Pharmaceutical USA, Inc.

3 Skyline Drive

Hawthorne, NY 10532, USA

Telephone: +1 914-345-9001

The legal and commercial name of TDC is The Taro Development Corporation. TDC is an indirect wholly owned subsidiary of Sun Pharma. TDC’s principal executive offices are located at c/o Taro Pharmaceutical USA, Inc., 3 Skyline Drive, Hawthorne, NY 10532, USA, and the telephone number at such address is +1 914-345-9001.

2

Sun Pharma Holdings (“SPH”)

c/o Rogers Capital Corporate Services Limited 3rd Floor, Rogers House, No. 5 President John Kennedy Street Port Louis, Mauritius

Telephone: + 230 203 1100

The legal and commercial name of SPH is Sun Pharma Holdings. SPH is an indirect wholly owned subsidiary of Sun Pharma. SPH’s principal executive offices are located at c/o Rogers Capital Corporate Services Limited, 3rd Floor, Rogers House, No. 5 President John Kennedy Street, Port Louis, Mauritius, and the telephone number at such address is + 230 203 1100.

Libra Merger Ltd. (“Merger Sub”)

c/o Alkaloida Chemical Company ZRT

Kabay János u. 29

H-4440 Tiszavasvari,

Hungary

Telephone: +3648521004

Libra Merger Ltd., an Israeli company wholly owned by Alkaloida, TDC and SPH and controlled by Sun Pharma, was formed solely for the purpose of engaging in the acquisition of Taro. Merger Sub was incorporated on July 18, 2023 and has engaged in no business activities other than those relating to the acquisition of Taro.

The Merger (Page 49)

Taro, Sun Pharma, Alkaloida, TDC, SPH and Merger Sub entered into the merger agreement on January 17, 2024. Under the merger agreement, Merger Sub will merge with and into Taro and each ordinary share of Taro, nominal value NIS 0.0001 per share, outstanding immediately prior to the effective time of the merger (other than ordinary shares of Taro held by the Interested Shareholders) will automatically be converted into and represent solely the right to receive $43.00 in cash, without interest and less any applicable withholding tax. Taro will become an indirect substantially wholly owned subsidiary of Sun Pharma and its affiliates.

See “The Merger Agreement—The Merger.”

Merger Consideration (Page 49)

If the merger is completed, under the merger agreement, each outstanding ordinary share of Taro (other than outstanding shares of Taro held by the Interested Shareholders) will automatically be converted into and represent solely the right to receive $43.00 in cash, without interest and less any applicable withholding tax.

After the merger is completed, you will have the right to receive the merger consideration, but you will no longer have any rights as a Taro shareholder and will have no rights as a shareholder of Sun Pharma or any of its affiliates. You will receive written instructions from the paying agent appointed by Sun Pharma for sending in your share certificates and receiving the cash consideration to which you will be entitled.

See “The Merger Agreement—Merger Consideration.”

Market Price (Page 68)

Our ordinary shares are quoted on the NYSE, under the symbol “TARO.” On May 26, 2023, the last full trading day before the public announcement of Sun Pharma’s offer to take Taro private, the closing per share price of our ordinary shares on the NYSE was $29.39. On    , 2024, the last full trading day prior to the date of this proxy statement, the closing price for our ordinary shares on the NYSE was $     per share. See “Market Price and Dividend Data.”

3

Material United States Federal Income Tax Considerations of the Merger (Page 41)

The exchange of Taro ordinary shares for cash pursuant to the merger generally will be a taxable transaction for U.S. federal income tax purposes. See “Special Factors—Material United States Federal Income Tax Consequences of the Merger.”

Tax matters can be complicated, and the tax consequences of the merger to holders will depend on the facts of their own situation. We strongly urge holders to consult their own tax advisors to fully understand the tax consequences of the merger to them in light of their particular circumstances.

Material Israeli Income Tax Consequences of the Merger (Page 43)

Your receipt of cash in exchange for your ordinary shares pursuant to the merger agreement will be a taxable transaction for Israeli tax purposes, unless a specific exemption is available under Israeli tax law or unless a double taxation prevention treaty between Israel and your country of residence provides otherwise. Certain exemptions from Israeli tax may apply to non-Israeli residents, including U.S. residents. You may be required to provide certain declarations and other documents regarding your status and shareholdings for the purposes of evaluating the applicability of Israeli withholding tax, and you may also be required to obtain a valid exemption tax certificate from the Israeli tax authority. See “Special Factors—Material Israeli Income Tax Consequences of the Merger.”

Tax matters can be complicated, and the tax consequences of the merger to you will depend on the facts of your own situation. We strongly urge you to consult your own tax advisor to fully understand the tax consequences of the merger to you.

No Appraisal Rights (Page 41)

Under Israeli law, our shareholders are not entitled to appraisal rights in connection with the merger.

Creditors’ Rights

Our Board has unanimously determined, considering the financial position of Taro and Merger Sub, that no reasonable concern exists that considering the financial condition of Taro and Merger Sub, following the merger, Taro, as the surviving corporation, would be unable to fulfill its obligations to its creditors. However, our creditors may file objections to the merger with an Israeli district court, which may, in its discretion, provide a remedy, including suspension or enjoinment of the merger, to any creditor of Taro or Merger Sub who so objects if the court determines that there is a reasonable concern that, following the merger, we will be unable to fulfill our obligations to our creditors or any creditors of Merger Sub.

Recommendations of the Special Committee, the Audit Committee and the Board; Fairness of the Transactions (Page 20)

After careful consideration, acting on the unanimous recommendation of each of the Special Committee and the Audit Committee, the Board determined that the Transactions are advisable and fair to, and in the best interests of, Taro and its shareholders. Each of the Special Committee, the Audit Committee and the Board has approved the Transactions. Accordingly, the Board unanimously recommends that Taro shareholders vote “FOR” the approval of the Transactions.

In making these determinations and recommendations, each of the Special Committee, the Audit Committee and the Board considered a number of factors, including those described in the section of this proxy statement entitled “Special Factors—Recommendations of the Special Committee, Audit Committee and the Board; Fairness of the Transactions.”

4

Opinion of the Special Committee’s Financial Advisor (Page 29)

The Special Committee retained BofA Securities, Inc. (“BofA Securities”) to act as its financial advisor in connection with the merger. BofA Securities is an internationally recognized investment banking firm which is regularly engaged in the valuation of businesses and securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. The Special Committee selected BofA Securities to act as its financial advisor to the Special Committee in connection with the merger on the basis of BofA Securities’ experience in transactions similar to the merger, its reputation in the investment community and its familiarity with the Company and its business.

On January 17, 2024, at a meeting of the Special Committee held to evaluate the merger, representatives of BofA Securities delivered to the Special Committee the oral opinion of BofA Securities, which was confirmed by delivery of a written opinion dated January 17, 2024, to the effect that, as of the date of the opinion and based on and subject to the factors and assumptions set forth in the written opinion, the merger consideration to be received in the merger by the Minority Shareholders was fair, from a financial point of view, to the Minority Shareholders.

The full text of BofA Securities’ written opinion to the Special Committee, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Appendix B to this proxy statement and is incorporated by reference herein in its entirety. BofA Securities delivered its opinion to the Special Committee for the benefit and use of the Special Committee (in its capacity as such) in connection with and for purposes of its evaluation of the merger. BofA Securities expressed no opinion or view as to any terms or other aspects or implications of the merger (other than the merger consideration to the extent expressly specified in such opinion) and no opinion or view was expressed as to the relative merits of the merger in comparison to other strategies or transactions that might be available to the Company or in which the Company might engage or as to the underlying business decision of the Company to proceed with or effect the merger. BofA Securities’ opinion does not constitute a recommendation as to how any holder of Taro ordinary shares should vote or act in connection with the merger or any other matter.

Position of the Sun Pharma Entities as to Fairness of the Transactions (Page 36)

Under the U.S. Securities and Exchange Commission (which we refer to as the “SEC”) rules governing “going private” transactions, each of the Sun Pharma Entities may be deemed to be an affiliate of Taro and engaged in the going-private transaction and therefore are required to provide certain information regarding their position as to the fairness of the Transactions to the Minority Shareholders who will receive the merger consideration in the merger. The Sun Pharma Entities are making the statements included herein solely for purposes of complying with such requirements of Rule 13e-3 and related rules and regulations under the Securities Exchange Act of 1934, as amended (which we refer to as the “Exchange Act”). The Sun Pharma Entities have interests in the merger that are different from, and/or in addition to, those of the other shareholders of Taro by virtue of their continuing interests in Taro after the completion of the merger. The views of the Sun Pharma Entities should not be construed as a recommendation to any Taro shareholder as to how that shareholder should vote on the proposal to approve the Transactions.

The Sun Pharma Entities believe that the merger is fair to the Minority Shareholders. See “Special Factors—Position of the Sun Pharma Entities as to Fairness of the Transactions.”

Purposes and Effects of the Merger; Reasons for the Merger (Page 39)

Purpose of Taro

The purpose of Taro’s engaging in the merger at this time is to enable the Minority Shareholders to realize the value of their investment in Taro in cash, for Taro to gain a larger and more varied product portfolio and

5

customer base and to provide Taro with additional capabilities, including access to Sun Pharma’s research and development resources. See “Special Factors—Purposes and Effects of the Merger; Reasons for the Merger—Taro’s Purpose and Reasons.”

Purpose of the Sun Pharma Entities

The purpose of the Sun Pharma Entities’ engaging in the merger at this time is to increase the ownership of ordinary shares by Sun Pharma and its affiliates from the current position of approximately 78.5% of the outstanding ordinary shares to 100%. Upon completion of the merger, Taro will become an indirect substantially wholly owned subsidiary of Sun Pharma and its affiliates. See “Special Factors—Purposes and Effects of the Merger; Reasons for the Merger—The Sun Pharma Entities’ Purpose and Reasons.”

Effects of the Merger

As a result of the proposed merger, all ordinary shares, other than ordinary shares beneficially owned by the Interested Shareholders, will be converted into the right to receive $43.00 per share, without interest and subject to applicable withholding taxes.

Sun Pharma and its affiliates, as the owners of Taro (the surviving entity in the merger) and its business following the effective time, will be the only beneficiaries of any earnings and growth of Taro following the proposed merger.

Upon completion of the proposed merger, the ordinary shares of Taro will cease to be listed on the NYSE, will not be publicly traded, and will be deregistered under the Exchange Act.

Financing of the Merger (Page 41)

Sun Pharma, Alkaloida, TDC and/or SPH have sufficient funds to pay the aggregate merger consideration from their cash or cash equivalents on hand at the time the Merger is completed. The merger is not subject to a financing condition. See “Special Factors—Financing of the Merger.”

The Extraordinary General Meeting and Class Meetings of Taro’s Shareholders (Page 71)

Date, Time and Place. The extraordinary general meeting of Taro shareholders, the class meeting of the holders of Taro’s ordinary shares and the class meeting of the holders of the Founder Shares will be held via live webcast on     , 2024, at 10:00 a.m., Israel time,     , 2024, at 11:00 a.m., Israel time, or immediately after the conclusion of the extraordinary general meeting, whichever is later, and     , 2024, at 12:00 (noon), Israel time, or immediately after the conclusion of the class meeting of Taro’s ordinary shares, whichever is later, respectively, and in person at Meitar Law Offices located at 16 Abba Hillel Road, 10^th Floor, Ramat Gan, Israel, to consider and vote upon a proposal to approve the Transactions, as more fully described in this proxy statement.

Record Date and Voting Power. You are entitled to vote at the meetings if you own any of our shares at the close of business in New York City on    , 2024, the record date for the meetings. You will have one vote at the meetings for each share you own at the close of business on the record date. As of    , 2024, there were    ordinary shares and 2,600 Founder Shares issued and outstanding. As of    , 2024, Sun Pharma and its affiliates and our directors and executive officers and their affiliates beneficially own or control approximately 78.5% of the ordinary shares and 100% of the Founder Shares, which together represent in the aggregate approximately 85.7% of the total voting power. As of that date, Sun Pharma beneficially owned through Alkaloida and other subsidiaries 29,497,813 ordinary shares. See “Special Factors—Interests of Taro’s Executive Officers and Directors in the Merger” (page 36).

6

Quorum. A quorum of our shareholders is necessary to hold a meeting. A quorum is present if three Taro shareholders are present in person or by proxy holding among them a number of shares entitling them to one-third of the voting power of Taro or such class of Taro shares. In the event that a quorum is not present at the relevant meeting, it is expected that such meeting will be adjourned or postponed to solicit additional proxies.

Procedures for Voting. You may vote by any of the following methods:

If your shares are held in “street name” by your broker, bank or other nominee, you should instruct your broker, bank or other nominee to vote your shares by following the instructions provided by your broker, bank or other nominee. Your broker, bank or other nominee will not vote your shares without instructions from you. Remember, if you fail to instruct your broker, bank or other nominee to vote your shares, your vote will not be counted for purposes of approving the Transactions. For your shares to be counted toward either the ordinary majority or the special tally required for approval of the Transactions, your broker, bank or other nominee must confirm that you are not an Interested Shareholder.

Required Vote. Under the Companies Law and pursuant to the organizational documents of Taro, the Transactions must be approved by (a) the affirmative vote of at least 75% of the total voting power of Taro present (in person or by proxy) and voting at the extraordinary general meeting, including at least a majority of the total voting power held by the Minority Shareholders present (in person or by proxy) and voting at the extraordinary general meeting, unless the total voting power held by the Minority Shareholders and voting against the merger does not exceed 2% of the total voting power of the Company; (b) the affirmative vote of at least 75% of the Taro ordinary shares present (in person or by proxy) and voting at the ordinary class meeting; and (c) the affirmative vote of at least 75% of the Founder Shares present (in person or by proxy) and voting at the founders class meeting.

Interests of Taro’s Executive Officers and Directors in the Merger (Page 36)

When considering the recommendation of the Audit Committee, the Special Committee and the Board, you should be aware that all members of our Board and certain of our executive officers have interests in the merger in addition to their interests as Taro shareholders generally. These interests include, among other things:

In addition, as of     , 2024, the record date of the meetings, Sun Pharma beneficially owned 29,497,813 ordinary shares, or approximately 78.5% of our issued and outstanding ordinary shares and 100% of our issued and outstanding Founder Shares, representing in the aggregate approximately 85.7% of the total voting power in Taro’s shares.

These interests may be different from, or in addition to, your interests as Taro shareholders. The members of the Special Committee, the Audit Committee and the Board were aware of these additional interests, and considered them, when they approved the Transactions. See “Special Factors—Interests of Taro’s Executive Officers and Directors in the Merger.”

7

The Merger Agreement (Page 49)

Conditions to the Closing of the Merger. The obligations of the Sun Pharma Entities, on the one hand, and Taro, on the other hand, to complete the merger are subject to the satisfaction of certain conditions. See “The Merger Agreement—Conditions to Completion of the Transaction.”

Termination of the Merger Agreement. Sun Pharma, on the one hand, or Taro, on the other hand, may terminate the merger agreement under certain circumstances, which would prevent the merger from being consummated. See “The Merger Agreement—Termination of the Merger Agreement.”

Expenses. The merger agreement provides that, subject to limited exceptions, all fees and expenses incurred in connection with the Transactions will be paid by the party incurring such expenses. See “The Merger Agreement—Expenses.”

Litigation Relating to the Merger (Page 41)

We are not aware of any litigation related to the merger as of the current time.

8

SPECIAL FACTORS

General

The merger agreement provides that, subject to certain conditions, Merger Sub will merge with Taro, with Taro continuing as the Surviving Company in the merger. A copy of the merger agreement is attached as Appendix A to this proxy statement. You are urged to, and you should, read the merger agreement in its entirety because it is the legal document governing the merger.

Background to the Merger

As of May 26, 2023, Sun Pharma and its affiliates beneficially owned approximately 78.5% of Taro’s ordinary shares and 100% of Taro’s Founder Shares and thereby controlled approximately 85.7% of the voting power of Taro. At the time, Sun Pharma’s board of directors’ designees constituted and have continued to constitute a majority of the Board. On May 26, 2023, the last full trading day before the public announcement of Sun Pharma’s proposal, Taro’s ordinary shares closed at a price of $29.39 per share on the NYSE. The average closing price of Taro’s ordinary shares for the 60 trading days preceding the date of the Initial Proposal was $26.86.

On May 26, 2023, Sun Pharma delivered a proposal letter to the Board that contained an unsolicited, non-binding indication of interest to acquire all of the outstanding ordinary shares, other than any shares already held by the Interested Shareholders, for a purchase price of $38.00 per share, in cash, by way of a reverse triangular merger (the “Initial Proposal”). The Initial Proposal indicated that Sun Pharma had no intention of selling any of its shares of Taro to any third party. The Initial Proposal represented a premium of 29.3% over the closing price of the ordinary shares on May 26, 2023, and a 41.5% premium over the average closing price of the ordinary shares over the 60 trading days preceding the date of the Initial Proposal (May 26, 2023).

Also on May 26, 2023, Sun Pharma filed with the SEC an amendment to its Schedule 13D reflecting the submission of the Initial Proposal with a copy of the letter delivered to the Board attached. On May 26, 2023, Taro issued a press release confirming it had received the Initial Proposal. On May 30, 2023, the first full trading day following the public announcement of the Initial Proposal, Taro’s ordinary shares closed at a price of $36.10 per share on the NYSE.

On May 26, 2023, at a meeting of the Board, the Board established the Special Committee, consisting of Ms. Linda Benshoshan, Dr. Dov Pekelman and Dr. Robert Stein, each of whom was determined by the Board to be independent, at the time of their election as members of the Board and in connection with the merger, of Taro and of Sun Pharma and its affiliates. The Board empowered the Special Committee with the full power and authority of the Board, to the maximum extent permitted by applicable law, to take any and all actions on behalf of the Board and Taro that the Special Committee may deem necessary, advisable or appropriate in connection with any and all aspects of a potential transaction that would result in the acquisition by Sun Pharma and its affiliates of all the Taro ordinary shares not currently owned by them, including, without limitation, (i) to evaluate and negotiate the potential transaction, (ii) to engage and retain its own advisors in order to do so, (iii) to manage and administer the process of exploring the potential transaction (including the exploration and consideration of alternatives thereto), (iv) to determine the appropriate strategy and personnel for engaging in discussions with respect to the potential transaction, (v) to make recommendations to the Board with respect to the potential transaction, (vi) to take such other actions with respect thereto to evaluate, negotiate and approve or reject the potential transaction and (vii) to make a recommendation to the shareholders of Taro with respect to any potential transaction that is submitted to a vote of the Taro shareholders. The Board also resolved that the consummation of any potential transaction with Sun Pharma was irrevocably conditioned on the approval of the transactions by the Special Committee.

On May 28, 2023, the Special Committee held a meeting by videoconference and considered three Israeli law firms to potentially engage as independent Israeli counsel to the Special Committee. At that meeting, Dr. Pekelman informed the other committee members that he was considering resigning from the Board for personal reasons. Dr. Pekelman did not indicate any disagreement with any matter relating to Taro’s operations, policies or practices.

9

On May 30, 2023, Dr. Pekelman resigned from the Board, and on May 31, 2023, Taro publicly announced Dr. Pekelman’s resignation.

On June 11, 2023, the Special Committee held a meeting attended by representatives of the Israeli law firm Goldfarb Gross Seligman & Co. (“Goldfarb”). At the meeting, representatives of Goldfarb gave an overview of their experience in cross-border merger and acquisition transactions, going-private acquisitions and special committee representation. They also discussed potential transaction structures, the duties of the members of the Special Committee under Israeli law, and the requirements of a robust, independent transaction process that would enable the Special Committee to negotiate with Sun Pharma at arm’s length to achieve the best outcome for the Minority Shareholders. They also discussed whether to add a third member to the Special Committee.

On June 15, 2023, the Special Committee held a meeting by videoconference and resolved to suggest that Taro appoint Dr. Oded Sarig as a member of the Special Committee. Dr. Sarig is currently a consultant who earned both an MBA and PhD in finance from the University of California, Berkley, and over a 38-year career taught finance at Columbia University, Tel Aviv University, The Wharton School and IDC Herzliya, served as the Israeli Commissioner of Capital Markets, Insurance and Savings, and published multiple articles and books on economics and finance, including regarding the valuation of companies.

On June 27, 2023, at a Board meeting, the Board appointed Dr. Sarig to serve as an independent director of the Board, and as a member of the Special Committee, to fill the vacancy created by the resignation of Dr. Pekelman. The Board determined that Dr. Sarig is independent, at the time of his election as member of the Board, of Taro and of Sun Pharma and its affiliates.

On June 28, 2023, the Special Committee held a meeting, attended by representatives of Goldfarb, during which the Special Committee resolved to appoint Ms. Benshoshan as the chairperson of the Special Committee (the “Chair”) and to engage Goldfarb as its independent Israeli counsel. The Special Committee considered proposals received from two U.S.-based law firms to serve as its independent U.S. counsel and discussed potential candidates to serve as its independent financial advisor. The Special Committee also discussed its desire to set a fee structure with each of its legal and financial advisors that would not be based on the outcome of the transaction process. The Special Committee also discussed potential transaction structures, the duties of the members of the Special Committee under Israeli law, and the requirements of a robust, independent transaction process that would enable the Special Committee to consider alternative transactions and, if appropriate, negotiate with Sun Pharma at arm’s length to achieve the best outcome for the Minority Shareholders.

On July 3, 2023, the Special Committee held a meeting, attended by representatives of Goldfarb, during which Goldfarb presented the legal duties, exposures and protections of the Special Committee under Israeli law.

On July 5, 2023, the Special Committee held a meeting, attended by representatives of Goldfarb as well as Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden”) and a second U.S.-based law firm, during which the Special Committee interviewed separately the two U.S.-based law firms to serve as its independent U.S. counsel. Each firm presented its experience in M&A, going-private transactions and special committee representation, and discussed its insights on the transaction process.

On each of July 6 and July 11, 2023, the Special Committee held a meeting during which it separately interviewed BofA Securities and a second global investment bank to serve as its independent financial advisor. Each firm presented its qualifications and experience in M&A, going-private transactions and special committee representation, and discussed its insights on the transaction process. The Special Committee asked each firm to provide a fee proposal that would not be based on the outcome of the transaction process.

10

On July 13, 2023, the Special Committee held a meeting, attended by representatives of Goldfarb, during which the Special Committee discussed the candidates for financial advisor and for U.S. counsel. The Special Committee decided to ask each investment bank to revise its fee proposal and decided to engage Skadden as its independent U.S. counsel.

On July 17, 2023, the Special Committee held a meeting, attended by representatives of Goldfarb and Skadden, during which the Special Committee discussed the revised fee proposal submitted by each of the candidates for financial advisor and the draft engagement letters for Goldfarb and Skadden.

On July 19, 2023, the Company’s second largest shareholder, Krensavage Asset Management LLC (“Krensavage”), issued a press release (the “Krensavage Press Release”) opposing the Initial Proposal, arguing that the purchase price set forth in the Initial Proposal was inadequate for various reasons, including in light of Taro’s large cash balance.

On July 20, 2023, the Special Committee held a meeting, attended by representatives of Goldfarb and Skadden, during which the Special Committee approved the final version of its engagement letters with each of Goldfarb and Skadden, and approved in principle the engagement of BofA Securities as its independent financial advisor, subject to finalization of an engagement letter with BofA Securities, for a fixed fee, with no contingent amounts payable based on the outcome of the transaction process. BofA Securities was chosen because of the depth of its expertise in the healthcare industry and its extensive experience in representing special committees in going-private transactions. The participants also discussed the Krensavage Press Release and considered the arguments therein.

On July 25, 2023, the Special Committee held a meeting, attended by representatives of Goldfarb and Skadden, during which the Special Committee discussed that a Sun Pharma official asked a member of the Special Committee to facilitate a business matter that is unrelated to the Merger between Sun Pharma and another company. The Special Committee resolved this matter by sending a letter to Sun Pharma requesting not to involve any members of the Special Committee in any business affairs of Sun Pharma or its affiliates (other than Taro) during the pendency of the transaction process and notifying Sun Pharma that the Chair will serve as the liaison of the Special Committee to Sun Pharma. The Special Committee also instructed its members not to be involved in any business affairs of Sun Pharma or its affiliates (other than Taro) during the pendency of the transaction process. Since then, there has been no communication about any business affairs of Sun Pharma or its affiliates (other than Taro) between any representatives of Sun Pharma or its affiliates and any member of the Special Committee regarding matters unrelated to the Merger. In addition, at this meeting a representative of Skadden delivered a presentation regarding practical considerations related to the transaction process. Further, the Chair informed the participants she had discussed the Krensavage Press Release with a representative of BofA Securities, and the Committee decided that it would wait until it had a better understanding of the Company’s valuation prior to discussing the Krensavage Press Release with representatives from Sun Pharma.

Between July 23 and August 9, 2023, representatives of BofA Securities and Goldfarb discussed and exchanged several drafts of the BofA Securities engagement letter, in coordination with the Chair and Skadden. The main issues discussed related to the fee structure, expense reimbursement, withholding tax, termination and reengagement provisions, confidentiality undertakings, indemnification terms and conflicts of interest.

On August 9, 2023, at a meeting of the Special Committee with Goldfarb in attendance, the Special Committee discussed the draft BofA Securities engagement letter and the absence of any conflicts of interest or any other matter that would prevent BofA Securities from acting as an independent financial advisor to the Special Committee. The Special Committee authorized Goldfarb to finalize the draft, which it did, and BofA Securities executed the engagement letter later that day.

On August 10, 2023, the Special Committee held a meeting, attended by representatives of BofA Securities, Goldfarb and Skadden, to discuss Taro management’s financial model. The Special Committee noted that Taro management had not prepared a long-term financial model for Taro and discussed with representatives of BofA Securities the need for Taro management to prepare a long-term financial model for Taro. The participants also discussed the Krensavage Press Release and the opportune time to discuss it with Sun Pharma and the Special Committee decided that it would be preferable to first receive BofA Securities financial analysis.

On August 15, 2023, representatives of Taro management, Taro’s Israeli counsel, Meitar Law Offices (“Meitar”), BofA Securities, Goldfarb and Skadden met by videoconference to discuss preparation by Taro management of a long-term financial model for Taro (the “Long-term Financial Model”).

On August 18, 2023, at the request of Taro management, the engagement letter with BofA Securities was amended to extend the confidentiality undertakings of BofA Securities from a period of 12 months to 24 months.

On August 23, 2023, the Special Committee held a meeting by videoconference, with representatives of BofA Securities, Goldfarb and Skadden in attendance, during which representatives of BofA Securities summarized the kick-off call with Taro management and answered the Special Committee’s questions with regard to the process and timeline.

11

On August 25, 2023, Taro management held a meeting with BofA Securities by videoconference also attended by Goldfarb, Meitar, Skadden and Taro’s U.S. counsel, Shearman & Sterling LLP (“Shearman”) to discuss Taro management’s preparation of the Long-term Financial Model.

On August 31, 2023, the Special Committee held meetings, with representatives of BofA Securities, Goldfarb and Skadden in attendance, during which representatives of BofA Securities updated the Special Committee regarding the progress of the preparation of the Long-term Financial Model and held discussions about Taro’s business.

On September 6, 2023, representatives of BofA Securities held a meeting by videoconference with Taro management, attended by representatives of Goldfarb, Meitar, Skadden and Shearman, during which representatives of BofA Securities posed questions to Taro management about Taro’s business to better understand Taro’s operations, and the participants discussed the process for the preparation of the Long-term Financial Model.

On September 7, 2023, the Special Committee held a meeting with representatives of BofA Securities, Goldfarb and Skadden in attendance, during which representatives of BofA Securities updated the Special Committee on the preparation of the Long-term Financial Model.

On September 11, 2023, the Special Committee held a meeting by videoconference with representatives of BofA Securities, Goldfarb and Skadden in attendance. Representatives of BofA Securities updated the Special Committee on the status of the preparation of the Long-term Financial Model and the receipt from Taro management of other relevant financial data.

On September 13, 2023, representatives of BofA Securities held a meeting by videoconference with Taro management and representatives of Goldfarb, Skadden and Shearman in attendance, during which the participants discussed Taro’s income statement.

On September 14, 2023, the Special Committee held a meeting by videoconference with representatives of BofA Securities, Goldfarb and Skadden in attendance. The Special Committee discussed negotiation strategy, and BofA Securities provided an update on the preparation of the Long-term Financial Model. A discussion was held concerning how to treat Taro’s cash reserves.

On September 20, 2023, representatives of BofA Securities held a meeting by videoconference with Taro management, attended by representatives of Goldfarb, Skadden, Meitar and Shearman, to discuss certain aspects of Taro’s business, and Taro management updated the participants on its progress in preparing the Long-term Financial Model. The participants also discussed the financial aspects of the integration of the Alchemee business and Taro’s estimated litigation loss contingency amount related to Taro’s ongoing multi-jurisdiction civil antitrust matters (the “Litigation Loss Contingency Amount”, and such ongoing multi-jurisdiction civil antitrust matters, the “Pending Litigation”).

With respect to the Pending Litigation, Taro is party to numerous claims and investigations brought under federal, state and local antitrust and other laws by various plaintiffs, including state governments, and federal and state governmental agencies, alleging that Taro, together with other pharmaceutical manufacturers and in some cases the entire industry, engaged in conspiracies to fix drug prices and/or allocate customers and market share of generic pharmaceutical products in the U.S. In November 2021, Taro U.S.A. entered into a settlement agreement (the “Settlement Agreement”) with private litigants, on behalf of the private litigants themselves and the putative class of all direct purchasers of certain generic pharmaceutical products. The United States District Court for the Eastern District of Pennsylvania approved the Settlement Agreement on March 10, 2023, pursuant to which Taro U.S.A. paid $67.6 million, which was reduced by $7.96 million as a result of the threshold percentage of class members that opted out of the settlement. The amounts paid pursuant to the Settlement Agreement reduced the Company’s provision of $200 million for the Litigation Loss Contingency Amount to $140 million, as of December 31, 2023.

On October 2, 2023, the Special Committee held a meeting by videoconference, with representatives of BofA Securities, Goldfarb, Skadden and Shearman in attendance, to follow up on the progress of the preparation of the Long-term Financial Model.

On October 4, 2023, representatives of BofA Securities held a meeting by videoconference with Taro management, attended by representatives of Goldfarb, Meitar and Skadden, to discuss Taro’s leading product revenues by region. The participants also discussed the methodology for projecting Taro’s performance for the outer years of the Long-term Financial Model, which were derived by extrapolating Taro management’s financial model, including growth and margin trends.

12

On October 5, 2023, the Special Committee held a meeting by videoconference, with representatives of BofA Securities, Goldfarb and Skadden in attendance, to receive an update on the status of the Long-term Financial Model. Discussions were held about aspects of Taro’s business and the methodology used by Taro management in preparing its projections. The Special Committee requested a meeting with BofA Securities to preview the Long-term Financial Model with the Special Committee before it was presented to the Special Committee by Taro management and to discuss key topic areas that they should focus their questions on with Taro management.

On October 6, 2023, October 9, 2023 and October 10, 2023, representatives of BofA Securities held three meetings by videoconference with Taro management, attended by representatives of Goldfarb, Meitar and Skadden at the three meetings and representatives of Shearman at the October 6, 2023 and October 9, 2023 meetings to discuss the final aspects of the Long-term Financial Model. Following these sessions, Taro management approved the Long-term Financial Model, including the outer years extrapolations, for presentation to the Special Committee and for use by BofA Securities in connection with its financial analysis.

On October 11, 2023, the Special Committee held a meeting by videoconference, with representatives of BofA Securities, Goldfarb and Skadden in attendance, during which representatives of BofA Securities reviewed with the Special Committee a draft of the Long-term Financial Model approved by Taro management, including certain assumptions contained therein, including the risk that the total cost to resolve the Pending Litigation may materially exceed the estimated $141 million Litigation Loss Contingency Amount that had been previously approved by the Board (the “Board-approved Litigation Loss Contingency Amount”). The Special Committee asked to hear directly from Taro management on the Litigation Loss Contingency Amount at its next meeting.

On October 12, 2023, the Special Committee held a meeting by videoconference with Taro management and representatives of BofA Securities, Goldfarb and Skadden in attendance, to discuss the Long-term Financial Model. Before Taro management joined the meeting, the legal advisors discussed the Special Committee’s fiduciary duties with its members. Taro management then joined the meeting and presented the Long-term Financial Model to the Special Committee, as well as a review of their assumptions underlying such model regarding industry and company trends, products, expenses and growth expectations. The Special Committee inquired, among other things, about the Pending Litigation and the Litigation Loss Contingency Amount.

On October 15, 2023, the Special Committee held a meeting by videoconference, with representatives of Goldfarb in attendance, to discuss the Long-term Financial Model. The Special Committee discussed Taro’s cash balance, the Alchemee business and the financial benefits expected to accrue by taking Taro private and the Litigation Loss Contingency Amount. The Special Committee concluded that the Litigation Loss Contingency Amount contained in the draft Long-term Financial Model was unsupported and decided that it would direct BofA Securities to use the Board-approved Litigation Loss Contingency Amount for purposes of its financial analysis of Taro, because that had been approved by management, the Audit Committee and the Board, and no other amount had been so approved.

On October 18, 2023, the Special Committee held a meeting by videoconference with representatives of BofA Securities, Goldfarb and Skadden in attendance, to discuss the Long-term Financial Model. BofA Securities expressed their view that the fundamental value of Taro was not adequately reflected in the Initial Proposal. The Special Committee requested BofA Securities to prepare a preliminary financial analysis of Taro using the Long-term Financial Model but with the Board-approved Litigation Loss Contingency Amount. The Special Committee also requested BofA Securities to prepare, for reference only and not as part of its financial analysis of Taro, a separate sensitivity analysis for review by the Special Committee utilizing the Long-term Financial Model but adjusted to reflect more conservative assumptions regarding annual growth rate in the outer years and a Litigation Loss Contingency Amount based on a doubling of the Board-approved Litigation Loss Contingency Amount.

On October 23, 2023, the Special Committee held a meeting by videoconference with representatives of BofA Securities, Goldfarb and Skadden, during which BofA Securities presented its preliminary financial analysis of Taro based on the Long-term Financial Model, using the Board-approved Litigation Loss Contingency Amount, in

13

addition to the sensitivity analysis requested by the Special Committee. BofA Securities’ preliminary financial analysis indicated an approximate implied equity value reference range per Taro ordinary share of $39.50 to $42.80. After discussing the presentation, the Special Committee and its advisors discussed whether to seek potential alternative buyers of Taro or the shares of the Minority Shareholders and concluded that it would be unrealistic to find bidders or to consummate an alternative transaction in light of Sun Pharma’s ownership of 78.5% of Taro’s ordinary shares and Sun Pharma’s stated position that it had no intention of selling any of its Taro shares to a third party. Instead, the Special Committee decided to enter into negotiations with Sun Pharma based on the Long-term Financial Model and the Board-approved Litigation Loss Contingency Amount. The Special Committee unanimously resolved to reject the Initial Proposal, as it deemed a price of $38.00 per share was inadequate and not fair and not in the best interests of the Minority Shareholders.

On October 25, 2023, in a videoconference attended by the Chair, another member of the Special Committee, Mr. Dilip Shanghvi, Chairman of the Board and managing director of Sun Pharma, and another representative of Sun Pharma, the Chair stated that, based on a review of the Long-term Financial Model and BofA Securities’ preliminary financial analysis based thereon, the $38.00 per share price in the Initial Proposal was inadequate and not fair and not in the best interests of the Minority Shareholders. The Chair stated that the Special Committee was still interested in discussing a transaction with Sun Pharma and subsequently asked Taro management to provide Mr. Shanghvi with Taro management’s financial model.

On November 13, 2023, in a videoconference call with the Chair and another member of the Special Committee, a representative of Sun Pharma said that the Sun Pharma team reviewed the Long-term Financial Model and found that there was a discrepancy between the Special Committee’s and Sun Pharma’s respective views of the valuation of Taro principally arising from the fact that Sun Pharma believes the potential exposure from the Pending Litigation may be higher than the Board-approved Litigation Loss Contingency Amount. The Chair and the other member of the Special Committee informed the Sun Pharma representative that the Special Committee would only use the Board-approved Litigation Loss Contingency Amount.

On November 21, 2023, a representative of Sun Pharma sent an email to the Chair inviting representatives of the Special Committee to meet Mr. Shanghvi and other representatives of Sun Pharma in New York to negotiate the proposed transaction.

On November 22, 2023, the Special Committee held a meeting by videoconference, with representatives of Skadden, Goldfarb and BofA Securities in attendance, to discuss Sun Pharma’s invitation to meet in New York. The Special Committee concluded that the Initial Proposal was too low to form a basis for such a meeting and instructed the Chair to inform Sun Pharma that the Special Committee needed to receive a higher proposal before traveling from Israel to New York to negotiate. Later that day, the Chair conveyed the Special Committee’s position to Sun Pharma by email. A representative of Sun Pharma responded on November 23, 2023, requesting a telephone call between the Chair and Mr. Shanghvi.

On November 24, 2023, the Chair and Mr. Shanghvi held a telephone call, during which Mr. Shanghvi said that his team at Sun Pharma had reviewed the Long-term Financial Model and thought that there was uncertainty in the Litigation Loss Contingency Amount provided in the Long-term Financial Model. Mr. Shanghvi also noted that if he were to be convinced by the Special Committee that the transaction price should be higher, Mr. Shanghvi would recommend an increase to the board of directors of Sun Pharma.

On November 25, 2023, the Special Committee held a meeting by videoconference, with representatives of BofA Securities, Goldfarb and Skadden in attendance, during which the Chair reported the details of the November 24, 2023 phone call with Mr. Shanghvi. The Special Committee discussed strategy for the Chair’s next call with Mr. Shanghvi and weighed the advantages and disadvantages of insisting on receiving a higher proposal prior to traveling from Israel to New York for an in-person meeting.

On November 26, 2023, the Chair held a telephone call with Mr. Shanghvi, during which she reiterated that the Special Committee believed that a share price of $38.00 per share was too low to serve as a basis for negotiations and therefore wanted Sun Pharma to offer a higher price per share before traveling to New York to negotiate further. Mr. Shanghvi responded that Sun Pharma’s board of directors directed Mr. Shanghvi not to increase the proposal before starting negotiations and gaining an understanding of the Special Committee’s perspective on Taro’s value.

14

On November 27, 2023, after consulting with the Special Committee’s other members and legal advisors, the Chair held another telephone call directly with Mr. Shanghvi during which the Chair stated that representatives of the Special Committee would agree to meet Mr. Shanghvi in New York, accompanied by the parties’ respective advisors, to negotiate a potential transaction. The Chair reiterated the Special Committee’s position that the transaction price should be substantially higher than the price set forth in the Initial Proposal, and Mr. Shanghvi confirmed that Sun Pharma was open to supporting a higher price if it was warranted.

On November 29, 2023, the Special Committee held a meeting, with representatives of BofA Securities, Goldfarb and Skadden in attendance, to discuss negotiation strategies ahead of the Special Committee’s meeting in New York with Mr. Shanghvi and other Sun Pharma representatives.

On December 7, 2023, Ms. Benshoshan and Dr. Sarig of the Special Committee held an all-day meeting at Taro’s offices in Hawthorne, New York, attended by representatives of BofA Securities, Skadden and Goldfarb, as well as representatives of Sun Pharma, including Mr. Shanghvi and Mr. Erik Zwicker, Vice President of Sun Pharma and General Counsel of Sun Pharma and Taro, participating in his capacity as Vice President and General Counsel of Sun Pharma, and Sun Pharma’s U.S. and Israeli legal advisors, Davis Polk & Wardwell LLP (“Davis Polk”) and Herzog, Fox and Neeman (“Herzog”), respectively. Mr. Shanghvi and Mr. Zwicker were the primary principals engaging in the negotiations on behalf of Sun Pharma. Ms. Benshoshan and Dr. Sarig reiterated to Sun Pharma the inadequacy of the Initial Proposal of $38.00 per share, and representatives of Sun Pharma discussed both their outlook of the generic pharmaceutical industry and their view of Taro’s prospects within the generic pharmaceutical industry. Specifically, Sun Pharma noted its lower projected revenues for Taro and the uncertainty of the potential exposure from the Pending Litigation. A Sun Pharma representative stated that the Board-approved Litigation Loss Contingency Amount was derived from an accounting calculation that involved aggregating, and extrapolating from, the settlement offers that Taro had made to plaintiffs, all of which had been rejected, and that, accordingly, Sun Pharma’s view was that the resolution amount related to the Pending Litigation (including amounts paid pursuant to settlements and jury awards) would, by definition, be higher than $141 million. Ms. Benshoshan and Dr. Sarig then noted that no robust basis exists to support any other estimate given the inherent uncertainty in determining the Litigation Loss Contingency Amount, and that the Board-approved Litigation Loss Contingency Amount was the only number approved by the Board. Representatives of Sun Pharma expressed their view that Taro’s valuation was at a range of $32.00 to $32.40 per share pursuant to their view of Taro’s lower projected revenues and the higher potential exposure from the Pending Litigation, and therefore the Initial Proposal of $38.00 per share already reflected a generous premium. After a lengthy discussion, Sun Pharma suggested that to bridge the gap with respect to the potential exposure from the Pending Litigation, it would offer a contingent value right (“CVR”), in addition to the proposed $38.00 per share offer price, which would entitle the Minority Shareholders to an additional future payment depending on the final aggregate resolution amount paid by Taro. Ms. Benshoshan and Dr. Sarig rejected this offer and expressed a willingness to consider a CVR mechanism only if the up-front cash portion of the consideration was increased by Sun Pharma. In order to discuss additional differences between the views of Sun Pharma and Taro management with respect to the Long-term Financial Model, representatives of Taro management were asked to join the meeting and explain certain aspects of their financial model, which they did. Following a break, the parties reconvened and Sun Pharma offered a price of $39.00 per share plus a CVR on terms to be discussed on a later date. Ms. Benshoshan responded that $39.00 per share was too low of a price to warrant discussion of the terms of a CVR, but that she would discuss the revised offer with the Special Committee.

Later on December 7, 2023, the Special Committee held a meeting with representatives of BofA Securities, Skadden and Goldfarb in attendance, during which the Special Committee reviewed the discussions that took place earlier that day and resolved to reject the offer of $39.00 per share in cash plus a CVR. BofA Securities was asked to convey this message to Sun Pharma, which they did.

On December 8, 2023, the Special Committee held a meeting by videoconference, with representatives of BofA Securities, Skadden and Goldfarb in attendance, during which a representative of BofA Securities stated to the other participants that a representative of Sun Pharma had communicated to BofA Securities that Sun Pharma would deliver a higher cash offer later that day, together with proposed terms for the CVR. The participants also discussed negotiation tactics.

15

Later on December 8, 2023, a representative of Sun Pharma and BofA Securities held a telephone call, during which Sun Pharma conveyed an offer price of $40.00 per share, in cash up front, and stated that Sun Pharma could not offer a higher price to bridge the difference in the parties’ views on the value of Taro’s business. Sun Pharma proposed a CVR with a term of 3.5 years that would potentially result in additional merger consideration, depending on the eventual resolution amount related to the Pending Litigation. The CVR would yield $9.55 per share if the settlement amount equaled the Board-approved Litigation Loss Contingency Amount, and the value of the CVR would increase, on a linear basis, if the eventual resolution amount was less than the Board-approved Litigation Loss Contingency Amount, or decrease, on a linear basis, if the eventual resolution amount was more than the Board-approved Litigation Loss Contingency Amount.

Later on December 8, 2023, the Special Committee held a meeting by videoconference, with representatives of BofA Securities, Skadden and Goldfarb in attendance, in which the participants discussed the revised offer made by Sun Pharma and related negotiation strategy. The Special Committee concluded that ascribing value to the CVR for a total resolution amount less than the Board-approved Litigation Loss Contingency Amount was not meaningful given such amount was based on settlement offers already made by Taro and that any estimate of the potential settlement amounts or jury awards would be speculative. The participants further determined that the final resolution amount is likely to be higher than the settlement offers already rejected. The Special Committee decided to reject Sun Pharma’s revised offer and instructed its advisors to communicate to Sun Pharma that the offer must be amended to transfer value from the CVR to the up-front cash payment, and that the term of the CVR should be reduced to 2 years.

Later on December 8, 2023, representatives of BofA Securities, Skadden and Goldfarb held a meeting by videoconference with representatives of Sun Pharma and Davis Polk, during which the advisors of the Special Committee conveyed and explained the position of the Special Committee. Sun Pharma’s representatives stated they would try to structure the economic terms of the CVR as requested, but that the term of the CVR could not be reduced.

Later in the evening on December 8, 2023, a representative of Sun Pharma contacted representatives of BofA Securities and conveyed a revised offer of $41.00 per share on behalf of Sun Pharma, plus a CVR that would pay the Minority Shareholders additional merger consideration of up to $5.00 per share depending on the total resolution amount related to the Pending Litigation if, within five years, the Pending Litigation had been resolved for a total amount equal to or less than the Board-approved Litigation Loss Contingency Amount, reducing on a linear basis to zero if the total amount is approximately double the Board-approved Litigation Loss Contingency Amount.

On December 9, 2023, the Special Committee held a meeting by videoconference, attended by representatives of BofA Securities and Skadden, during which representatives of BofA Securities informed the Special Committee of Sun Pharma’s revised offer. After further discussion, the Special Committee unanimously agreed to reject this offer and communicate to Sun Pharma that a higher up-front share price would be required for the Special Committee to consider accepting a revised offer. A representative of BofA Securities conveyed this message to a representative of Sun Pharma.

Later on December 9, 2023, a representative of Sun Pharma contacted representatives of BofA Securities and Skadden and presented a revised offer on behalf of Sun Pharma, which included $41.25 per share in cash up-front, plus a CVR whereby the Minority Shareholders could receive, at maximum, an additional $6.00 per share based on the same structure proposed the prior evening. The Sun Pharma representative stated that this was Sun Pharma’s best and final offer.

16

Later on December 9, 2023, the Special Committee held a meeting by videoconference, with representatives of BofA Securities and Skadden in attendance, during which representatives of BofA Securities presented Sun Pharma’s revised offer. The Special Committee discussed the drawbacks with including the CVR as part of the merger consideration, including: (i) the difficulty in assessing the value of the CVR due to the uncertainty associated with the eventual resolution of the Pending Litigation given the existence of multiple classes of plaintiffs and inherent uncertainty of litigation; and (ii) the possibility that the Minority Shareholders may not ascribe any material value to the CVR. The Special Committee unanimously agreed to reject Sun Pharma’s revised offer, to reiterate its preference for a higher up-front cash payment and to negotiate for a price of at least $43.00 per share without any CVR.

Later on December 9, 2023, representatives of BofA Securities and Skadden held a phone call with a representative of Sun Pharma to convey that the Special Committee continued to believe that the CVR was not in the best interest of the Minority Shareholders and that a higher up-front share price would be required in order to move forward.

On December 10, 2023, the Chair met in person with Mr. Shanghvi. At this meeting, the Chair proposed excluding the CVR, as appraising its value would (i) create greater uncertainty for the Minority Shareholders and (ii) cause the Minority Shareholders to not receive any additional consideration that may be payable pursuant to the CVR terms for several years. Instead, the Chair proposed an all-cash price of $47.00 per share. After a lengthy discussion, Mr. Shanghvi stated he would support an all-cash price of $43.00 per share in his communications with the board of directors of Sun Pharma. The Chair responded that she would consult with the rest of the Special Committee and the Special Committee’s legal and financial advisors concerning the revised offer.

Later on December 10, 2023, the Special Committee held a meeting by videoconference, together with representatives of BofA Securities, Skadden and Goldfarb, and discussed Sun Pharma’s revised proposal. The Special Committee determined that an all-cash price of $43.00 per share would be favorable to the Minority Shareholders and that asking Sun Pharma to further increase the price could jeopardize the transaction. The Special Committee noted that BofA Securities’ preliminary financial analysis that was previously presented to the Special Committee was based on the Long-term Financial Model, which contained several assumptions, certain of which the Special Committee believed to be optimistic, including a higher annual growth rate than the one indicated in the sensitivity analysis requested by the Special Committee and the Board-approved Litigation Loss Contingency Amount. The Special Committee unanimously authorized the Chair to agree in principle to Sun Pharma’s revised offer of $43.00 per share, subject to the negotiation and execution of a definitive merger agreement and the receipt of a fairness opinion from BofA Securities. The Chair then contacted Mr. Shanghvi and notified him that the Committee unanimously approved Sun Pharma’s revised offer.

On December 8, 2023, the last trading day prior to the foregoing meeting, Taro’s ordinary shares closed on the NYSE at a price of $37.89 per share.

Later on December 10, 2023, a telephone call was held among representatives of Sun Pharma, Davis Polk, Herzog, Skadden, Goldfarb and BofA Securities to discuss next steps, including required SEC filings.

17

On December 11, 2023, Taro filed with the SEC a report on Form 6-K reporting that Sun Pharma had proposed to acquire all of its outstanding ordinary shares, other than any shares already held by the Interested Shareholders, for a purchase price of $43.00 per share, in cash (the “Final Proposal”), and that the Special Committee confirmed that it had agreed in principle with the Final Proposal and agreed to negotiate definitive transaction agreements. In addition, Sun Pharma filed an amendment to its Schedule 13D with the SEC reflecting the agreement in principle.

On December 12, 2023, Taro’s ordinary shares closed on the NYSE at a price of $41.58 per share.

From December 15, 2023 to January 16, 2023, the legal advisors to Sun Pharma, Taro and the Special Committee exchanged drafts of a merger agreement and held several negotiation sessions. They discussed various issues including, but not limited to, the circumstances under which the Special Committee could change its recommendation and terminate the merger agreement (i.e., the so-called “fiduciary out” provisions), conditions to closing, employee-related covenants and the mechanism for dispute resolution.

On December 26, 2023, the Special Committee held a meeting by videoconference, attended by Goldfarb, during which representatives of Goldfarb presented the open issues in the draft merger agreement, focusing primarily on the “fiduciary out” provisions and closing conditions. Specifically, Sun Pharma took the position that the Special Committee should not be permitted to change its recommendation to accept Sun Pharma’s offer in the event that a superior proposal was received, and insisted that Sun Pharma have the right to terminate the agreement in the event of a material adverse change in Taro. The Special Committee instructed Goldfarb to reject those positions. Further, the Special Committee discussed including certain post-closing covenants related to the treatment of Taro’s employees.

Later on December 26, 2023, a telephone call was held between the Chair and Mr. Shanghvi, during which the Chair asked about Sun Pharma’s plans for Taro’s employees following the closing of the merger.

On December 27, 2023, a meeting was held by videoconference, attended by representatives from Goldfarb, Skadden, Herzog and Davis Polk, concerning the remaining open issues in the draft merger agreement. Sun Pharma’s representatives stated they would be willing to allow the Special Committee to change its recommendation in the event of a superior proposal, only if the Special Committee was not permitted to terminate the merger agreement prior to allowing Taro shareholders to vote to approve the merger agreement. The participants further discussed the likely enforceability of such a “force the vote” mechanism under Israeli law.

On December 28, 2023, the Special Committee held a meeting by videoconference, with Goldfarb in attendance, at which Goldfarb updated the Special Committee about the latest discussions on the draft merger agreement. The Special Committee instructed their legal advisors to ensure that the merger agreement contained satisfactory “fiduciary out” provisions, and did not contain any “force the vote” provisions or any closing condition relating to a material adverse change in Taro.

On December 31, 2023, a videoconference call was held between representatives of Goldfarb and Herzog, during which Goldfarb representatives conveyed the Special Committee’s position on the merger agreement, and the parties continued to exchange drafts of the merger agreement.

On January 4, 2024, the Chair called a representative of Sun Pharma regarding certain open issues in the merger agreement negotiations. The Chair asked the Sun Pharma representative to discuss such positions with Sun Pharma’s legal advisors. The Sun Pharma representative expressed that Sun Pharma may be willing to alter its position with respect to the closing condition allowing Sun Pharma to terminate the merger agreement in the event of a material adverse change in Taro’s business. With respect to Taro’s employees, the Sun Pharma representative stated that a transaction bonus would not be included in the merger agreement because the transaction would not involve a change of control, but that Sun Pharma was willing to agree to customary protective covenants with respect to the employees. Discussion ensued among the parties’ respective legal advisors regarding the remaining open issues in the draft merger agreement.

18

On January 9, 2023, the Special Committee held a meeting by videoconference, attended by representatives of Goldfarb and Skadden, during which Goldfarb representatives updated the Special Committee concerning the latest discussions with the legal advisors of Sun Pharma on the draft merger agreement. The Special Committee discussed the open issues regarding the “fiduciary out” provisions and the employee-related covenants, and directed Goldfarb to send a draft of the merger agreement that reflected the Special Committee’s positions. The draft merger agreement did not contain any “force the vote” provision or closing condition allowing for termination of the merger agreement by Sun Pharma in the event of a material adverse change in Taro, and it defined “superior proposal” as an offer for 15% of Taro’s ordinary shares, rather than 50% thereof.

On January 10, 2024, the Chair called a Sun Pharma representative and communicated to such representative that the Special Committee was steadfast in its position regarding the “fiduciary out” provisions.

Later on January 10, 2024, during a videoconference meeting among representatives of Sun Pharma, Davis Polk, Herzog, Goldfarb and Skadden, the Sun Pharma representative stated Sun Pharma had agreed to accept substantially all of the Special Committee’s latest revisions to the merger agreement, including those regarding the “fiduciary out” provisions.

On January 16, 2024, the Special Committee held a meeting by videoconference, with representatives of Goldfarb and Skadden in attendance, during which the Special Committee considered the Transactions. A representative of Goldfarb summarized the terms and conditions of the merger agreement and delineated for the Special Committee the fiduciary duties of its members, the transaction process to date and the required corporate approvals under Israeli law. A representative of Skadden presented the various positive and negative considerations regarding the Transactions and recorded certain statements made by the Special Committee.

Later on January 16, 2024, the Audit Committee held a meeting by videoconference, attended also by Dr. Sarig, a legal advisor employed by Taro, and representatives of Goldfarb and Skadden, to provide information necessary for the sole member of the Audit Committee who is not a member of the Special Committee, to make a fully formed decision when the Audit Committee would be expected to vote on the Transactions. One member of the Audit Committee who is also a member of the Special Committee did not attend this meeting. A representative of Goldfarb summarized the terms and conditions of the merger agreement and reviewed the fiduciary duties of the Special Committee members, the background of transaction process to date and the required corporate approvals under Israeli law, and the sole member of the Audit Committee who is not a member of the Special Committee asked various questions about the Transactions throughout the discussion. The participants also discussed various positive and negative considerations regarding the Transactions that the Special Committee had prepared.

Later on January 16, 2024, a final meeting regarding the merger agreement was held by videoconference, attended by a representative of Sun Pharma, the Chair and a representative of Goldfarb, during which Sun Pharma requested to tighten the definition of “superior proposal” in the merger agreement. The request was rejected.

On January 17, 2024, the Special Committee held a meeting by videoconference, with representatives of BofA Securities, Goldfarb and Skadden in attendance. Representatives of BofA Securities reviewed with the Special Committee BofA Securities’ financial analysis of the merger consideration and delivered to the Special Committee the oral opinion of BofA Securities, which was confirmed by delivery of a written opinion dated January 17, 2024, to the effect that, as of the date of the opinion and based on and subject to various assumptions and limitations set forth in the written opinion, the merger consideration to be received in the merger by the Minority Shareholders was fair, from a financial point of view, to the Minority Shareholders (as more fully described below in the section entitled “Special Factors—Opinion of the Special Committee’s Financial Advisor”). After discussion, the Special Committee unanimously approved the Transactions as advisable and fair to, and in the best interests of, Taro and its Minority Shareholders, and recommended that the Audit Committee of the Board, the Board and the Taro shareholders approve the Transactions.

19

Later on January 17, 2024, the Audit Committee of the Board held a meeting by videoconference, attended by a legal advisor employed by Taro and representatives of Meitar and BofA Securities to discuss the proposed Transactions with Sun Pharma and the recommendation of the Special Committee. A representative of BofA Securities presented an overview of its financial analysis (as previously delivered to the Special Committee) of the merger consideration to be received by the Minority Shareholders. The Audit Committee discussed and then unanimously approved the Transactions as advisable and fair to, and in the best interests of, Taro and its Minority Shareholders, and recommended that the Board and the Taro shareholders approve the Transactions. The Audit Committee also determined that the Transactions does not constitute a “distribution” as defined in the Companies Law.

Later on January 17, 2024, a Board meeting was held by videoconference to discuss the proposed Transactions with Sun Pharma and the recommendations of the Special Committee and the Audit Committee of the Board, with legal advisors employed by Taro and representatives of Meitar and BofA Securities in attendance. The Chair of the Special Committee presented an overview of the process conducted by the Special Committee, representatives of Meitar summarized the terms and conditions of the merger agreement and BofA Securities presented an overview of its financial analysis (as previously delivered to the Special Committee) of the merger consideration to be received by the Minority Shareholders. The Board adopted resolutions (i) declaring the Transactions advisable and fair to, and in the best interests of, Taro and the Taro shareholders, (ii) approving the Transactions and (iii) recommending that Taro shareholders approve the Transactions. The Board also determined that the Transactions do not constitute a “distribution” as defined in the Companies Law and that no reasonable concern exists that the Surviving Company of the merger will be unable to fulfill Taro’s obligations to its creditors. In addition, the Board authorized certain officers and directors who are unaffiliated with Sun Pharma to take necessary actions to effect the Transactions, including preparing a proxy statement, soliciting Taro shareholder approval of the Transactions, holding special meetings with Taro shareholders for such purpose, and preparing and filing documents required by applicable law.

Following the Board meeting, the parties executed the definitive merger agreement and BofA delivered its written fairness opinion to the Special Committee. Later that day, Taro and Sun Pharma issued a joint press release announcing the Transactions. In addition, Taro filed with the SEC a report on Form 6-K regarding the Transactions, attaching a copy of the merger agreement, and Sun Pharma filed with the SEC an amendment to its Schedule 13D reflecting the Transactions and attaching a copy of the merger agreement.

On January 30, 2024, a representative of the Special Committee received an email from a representative of Krensavage in which Krensavage stated it was opposed to the Final Proposal, arguing that the Final Proposal was inadequate for various reasons, including in light of Krensavage’s estimation of Taro’s liquidation value. On February 2, 2024, a representative of the Special Committee, after discussing with the Special Committee and its advisors, responded to the email from Krensavage, stating that Krensavage was encouraged to review the Proxy Statement when filed, which would contain certain material information that was unknown to Krensavage at the time of the correspondence. The Special Committee representative also noted Krensavage should reference Taro’s publicly available financial statements, which included the Board-approved Litigation Loss Contingency Amount. There have been no further communications between the Special Committee and Krensavage since the Special Committee’s email reply on February 2, 2024.

Recommendations of the Special Committee, the Audit Committee and the Board; Fairness of the Transactions

Recommendation of the Special Committee

As described above, the Board established the Special Committee consisting solely of independent directors, and empowered it with exclusive authority to review, evaluate, reject, negotiate and, if appropriate, approve and make a recommendation to the Audit Committee of Taro’s Board and the Board regarding the proposal from Sun Pharma and its affiliates. The Special Committee, by unanimous vote at a meeting held on January 17, 2024 and after a presentation by its independent financial advisor, determined that the Transactions are advisable and fair to, and in the best interests of, the Minority Shareholders.

The Special Committee engaged its own independent legal and financial advisors and received advice throughout the negotiations from such advisors. Since the members of the Special Committee are independent non-employee directors, the Special Committee believed that it could effectively represent the Minority Shareholders in negotiating the terms of the merger.

20

The Special Committee approved the Transactions and recommended that Taro’s shareholders vote to approve the Transactions. The Special Committee also recommended that the Audit Committee of the Board and the Board approve the Transactions.

In the course of reaching these determinations and decisions and making the recommendations described above, the Special Committee considered a number of positive factors relating to the Transactions, each of which the Special Committee believed supported its decision, including, but not limited to, the following (which factors are not necessarily presented in order of relative importance):

Opinion of the Special Committee’s Financial Advisor. The Special Committee considered the oral opinion of BofA Securities, which was confirmed by delivery of a written opinion dated January 17, 2024, to the Special Committee, to the effect that, as of the date of the opinion and based on and subject to various assumptions and limitations set forth in the written opinion, the merger consideration to be received in the merger by the Minority Shareholders was fair, from a financial point of view, to the Minority Shareholders (as more fully described below in the section entitled “Special Factors—Opinion of the Special Committee’s Financial Advisor” beginning on page 29);

21

22

23

24

In the course of reaching these determinations and decisions and making the recommendation described above, the Special Committee considered the following risks and potentially negative factors relating to the Transactions:

25

The Special Committee considered Taro’s net book value and liquidation value in its evaluation of the fairness of the Transactions to the Minority Shareholders, but found them to be immaterial and irrelevant to a determination of the substantive fairness of the Transactions. The Special Committee did not believe that Taro’s net book value was material to its conclusion regarding the substantive fairness of the Transactions because, in its view, net book value is not indicative of Taro’s market value since it is a purely historical measurement of financial position in accordance with generally accepted accounting principles in the United States (“GAAP”) and is not forward-looking or wholly based on fair value. The Special Committee did not believe that the liquidation value of Taro’s assets was material to its conclusion regarding the substantive fairness of the Transactions because it considers Taro to be a viable going concern business where value as a going concern is derived from cash flows generated from its continuing operations, which dominate its liquidation value. However, the Special Committee considered the Company’s significant cash balance in its analysis of the going-concern value of Taro.

The foregoing discussion includes the material factors considered by the Special Committee. In view of the variety of factors considered in connection with its evaluation of the Transactions, the Special Committee did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. In addition, individual directors may have given different weights to different factors. The Special Committee recommended the Transactions based upon the totality of the information it considered.

Recommendation of the Audit Committee and the Board

After careful consideration, our Audit Committee, upon the recommendation of the Special Committee, and our Board, upon the recommendation of the Special Committee and the Audit Committee, have unanimously approved the Transactions. In doing so, our Audit Committee and our Board determined that the Transactions, are advisable and fair to, and in the best interests of, Taro and the Minority Shareholders and that the merger does not constitute a “distribution” as defined in the Companies Law and our Board determined that, considering the financial position of Taro, no reasonable concern exists that Taro, as the Surviving Company, will be unable to fulfill its obligations to its creditors.

Our Board unanimously recommends that you vote “FOR” the proposal to approve the Transactions.

The Board considered and relied upon the analyses and the recommendation of the Special Committee (which analyses and recommendation were adopted by the Board) as set forth in the caption above entitled “Recommendation of the Special Committee” in arriving at this determination and recommendation. In considering the Special Committee’s analyses and recommendation, the Board reviewed and discussed information with respect to the Company’s financial condition, results of operations, businesses, competitive position and business strategy, on a historical and prospective basis, as well as current industry, economic and market conditions and trends, and discussed the Special Committee’s recommendation with the representatives of the Special Committee and the independent financial advisor and legal counsel of the Special Committee. The

26

following are the material factors that supported the Board’s determination and recommendation, in addition to the factors set forth in the caption above entitled “Recommendation of the Special Committee” (which factors are not necessarily presented in order of relative importance):

27

In considering the recommendations of the Special Committee, the Audit Committee (acting upon the recommendation of the Special Committee) and the Board (acting upon the recommendation of the Special Committee and the Audit Committee), the Company’s shareholders should be aware that certain of the Company’s directors and executive officers, may have interests with respect to the contemplated Transactions that may be in addition to, or that may be different from, the interests of the other Taro shareholders generally, as described in the section entitled “Special Factors—Interests of Taro’s Executive Officers and Directors in the Merger.” The members of the Special Committee, the Audit Committee and the Board were aware of these interests and considered them, among others, in reaching their determinations to approve the Transactions, and to make their recommendations to the Board and the Company’s shareholders, as applicable.

Our Audit Committee and our Board carefully considered all of these factors as a whole in reaching its determination and recommendation. Our Audit Committee and our Board each unanimously concluded that overall, the risks, uncertainties, restrictions and potentially negative factors associated with the Transactions were outweighed by the potential benefits of the Transactions and our Board concluded that, considering the financial position of Taro and Merger Sub, no reasonable concern exists that Taro, as the Surviving Company, will be unable to fulfill the obligations of Taro to its creditors.

Fairness of the Transactions

Our Board considered Taro’s net book value and liquidation value in its evaluation of the fairness of the Transactions to the Minority Shareholders, but found them to be immaterial and irrelevant to a determination of the substantive fairness of the Transactions. Our Board did not believe that Taro’s net book value was material to its conclusion regarding the substantive fairness of the Transactions because, in its view, net book value is not indicative of Taro’s market value since it is a purely historical measurement of financial position in accordance with U.S. generally accepted accounting principles and is not forward-looking or wholly based on fair value. Our Board did not believe that the liquidation value of Taro’s assets was material to its conclusion regarding the substantive fairness of the Transactions because it considers Taro to be a viable going concern business where value as a going concern is derived from cash flows generated from its continuing operations, which dominate its liquidation value. However, the Special Committee considered the Company’s significant cash balance in its analysis of the going-concern value of Taro.

Our Board believes that the merger consideration is fair in relation to Taro’s going concern value per share based on its knowledge of Taro’s business, prospects and industry (including the growing trend in company consolidations in the generic pharmaceutical market), the projections of Taro’s management contained in this proxy statement (including the assumptions contained therein) and Taro’s historical results of operations. Our Board did not calculate a specific per share going concern value for Taro because the merger consideration represents a premium to the market price of the ordinary shares prior to the announcement of the initial proposal from Sun Pharma and its affiliates and because of our Board’s extensive knowledge of Taro’s business, prospects and industry.

Our Board did not consider the potential for alternative transactions involving Taro because Sun Pharma and its affiliates did not, and do not, intend to consider or participate in any alternative transaction involving a sale of or reduction of Sun Pharma’s and its affiliates’ investment in Taro. For so long as Sun Pharma and its affiliates beneficially own approximately 78.5% of the issued and outstanding ordinary shares and 100% of the Founder Shares, it would not be possible for a third party to acquire control of Taro unless Sun Pharma supported such transaction. Our Board was aware that the purchase prices paid in previous purchases by Sun Pharma or its affiliates were significantly below the current market prices, but did not consider this relevant for its decision. Finally, our Board is not aware of any other offer during the last two years for Taro and accordingly no comparison to any such offer was made.

The foregoing discussion of factors considered by Taro’s Audit Committee and Board is not meant to be exhaustive but includes the material factors considered by the Audit Committee and the Board in declaring that

28

the Transactions, are fair to, and in the best interests of, Taro and its shareholders, approving the Transactions and recommending that Taro’s shareholders approve the Transactions. In view of the wide variety of factors considered by Taro’s Audit Committee and its Board in connection with the evaluation of the Transactions and the complexity of these matters, neither the Audit Committee nor the Board found it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination. Rather, the members of the Audit Committee and the members of the Board made their determination based on the totality of the information presented to them, and the judgments of individual members of the Audit Committee and the Board may have been influenced to a greater or lesser degree by different factors.

The Board unanimously recommends that you vote “FOR” the proposal to approve the Transactions.

Opinion of the Special Committee’s Financial Advisor

The Special Committee retained BofA Securities to act as its financial advisor in connection with the merger. BofA Securities is an internationally recognized investment banking firm which is regularly engaged in the valuation of businesses and securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. The Special Committee selected BofA Securities to act as a financial advisor to the Special Committee in connection with the merger on the basis of BofA Securities’ experience in transactions similar to the merger, its reputation in the investment community and its familiarity with the pharmaceutical industry.

On January 17, 2024, at a meeting of the Special Committee held to evaluate the merger, representatives of BofA Securities delivered to the Special Committee the oral opinion of BofA Securities, which was confirmed by delivery of a written opinion dated January 17, 2024, to the effect that, as of the date of the opinion and based on and subject to the factors and assumptions set forth in the written opinion, the merger consideration to be received in the merger by the Minority Shareholders was fair, from a financial point of view, to the Minority Shareholders.

The full text of BofA Securities’ written opinion to the Special Committee, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Appendix B to this proxy statement and is incorporated by reference herein in its entirety. The following summary of BofA Securities’ opinion is qualified in its entirety by reference to the full text of the written opinion. BofA Securities delivered its opinion to the Special Committee for the benefit and use of the Special Committee (in its capacity as such) in connection with and for purposes of its evaluation of the merger. BofA Securities expressed no opinion or view as to any terms or other aspects or implications of the merger (other than the merger consideration to the extent expressly specified in such opinion) and no opinion or view was expressed as to the relative merits of the merger in comparison to other strategies or transactions that might be available to the Company or in which the Company might engage or as to the underlying business decision of the Company to proceed with or effect the merger. BofA Securities’ opinion does not constitute a recommendation as to how any holder of Taro ordinary shares should vote or act in connection with the merger or any other matter.

In connection with rendering its opinion, BofA Securities has, among other things:

29

In arriving at its opinion, BofA Securities assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with it and relied upon the assurances of the management of the Company that it was not aware of any facts or circumstances that would make such information or data inaccurate or misleading in any material respect. With respect to the Management Forecasts, BofA Securities was advised by the management of the Company, and assumed, at the direction of the Special Committee, that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of the Company as to the future financial performance of the Company and BofA Securities relied, at the direction of the Special Committee, on the Management Forecasts for purposes of its opinion. BofA Securities did not make and was not provided with any independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of the Company or any other entity, nor did it make any physical inspection of the properties or assets of the Company or any other entity. BofA Securities did not evaluate the solvency or fair value of the Company or any other entity under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. BofA Securities assumed, at the direction of the Special Committee, that the merger would be consummated in accordance with the terms set forth in the merger agreement, without waiver, modification or amendment of any material term, condition or agreement and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the merger, no delay, limitation, restriction or condition, including any divestiture requirements or amendments or modifications, would be imposed that would have an adverse effect on the Company or any other entity or the merger (including the contemplated benefits thereof). BofA Securities also assumed, at the direction of the Special Committee, that the final executed merger agreement would not differ in any material respect from the Draft Agreement reviewed by BofA Securities.

BofA Securities expressed no view or opinion as to any terms or other aspects or implications of the merger (other than the merger consideration to the extent expressly specified in its opinion), including, without limitation, the form or structure of the merger, or any terms, aspects or implications of any other agreement, arrangement or understanding entered into in connection with or related to the merger or otherwise. BofA Securities was not requested to, and BofA Securities did not, solicit indications of interest or proposals from third parties regarding a possible acquisition of all or any part of the Company. BofA Securities’ opinion was limited to the fairness, from a financial point of view, of the merger consideration to be received by the Minority Shareholders, and no opinion or view was expressed with respect to any consideration received in connection with the merger by the holders of any class of securities, creditors or other constituencies of any party. In addition, no opinion or view was expressed with respect to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to any of the officers, directors or employees of any party to the merger, or class of such persons, relative to the merger consideration or otherwise, or as to any consideration or other direct or indirect benefits to be received in connection with or as a result of the Transactions by Sun Pharma or its affiliates, in its capacity as the controlling shareholder of the Company, or any other party. Furthermore, no opinion or view was expressed as to the relative merits of the merger in comparison to other strategies or transactions that might be available to the Company or in which the Company might engage or as to

30

the underlying business decision of the Company to proceed with or effect the merger. In addition, BofA Securities expressed no view or opinion with respect to, and BofA Securities relied, with the consent of the Special Committee, upon the assessments of the management of the Company, other representatives of the Company and representatives of the Special Committee regarding, legal, regulatory, accounting, tax and similar matters relating to the Company or any other entity or the merger (including the contemplated benefits thereof), as to which matters BofA Securities understood that the Company and the Special Committee obtained such advice as it deemed necessary from qualified professionals. BofA Securities further expressed no opinion or recommendation as to how any holder of Taro ordinary shares should vote or act in connection with the merger or any related matter.

BofA Securities’ opinion was necessarily based on financial, economic, monetary, market and other conditions and circumstances as in effect on, and the information made available to BofA Securities as of, the date of its opinion. The credit, financial and stock markets were experiencing unusual volatility and BofA Securities expressed no opinion or view as to any potential effects of such volatility on the Company or the merger. It should be understood that subsequent developments may affect BofA Securities’ opinion, and BofA Securities does not have any obligation to update, revise, or reaffirm its opinion. The issuance of BofA Securities’ opinion was approved by a fairness opinion review committee of BofA Securities. Except as described in this summary, the Company imposed no other instructions or limitations on the investigations made or procedures followed by BofA Securities in rendering its opinion.

The discussion set forth below in the section entitled “Summary of Material Company Financial Analyses” represents a brief summary of the material financial analyses presented by BofA Securities to the Special Committee in connection with its opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses performed by BofA Securities, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses performed by BofA Securities. Considering the data set forth in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by BofA Securities.

Summary of Material Company Financial Analyses.

Selected Publicly Traded Companies Analysis.

BofA Securities reviewed publicly available financial and stock market information for the Company and the following seven selected publicly traded companies that specialize in developing and manufacturing generic pharmaceuticals that, based on financial, business and operating characteristics, BofA Securities, in its professional judgment and experience, considered sufficiently relevant for purposes of this analysis:

BofA Securities reviewed, among other information, enterprise values for each of the selected publicly traded companies, and for the Company, calculated as equity value based on closing stock prices of the applicable company on January 16, 2024, plus debt, preferred equity and non-controlling interest (as applicable), and less cash and cash equivalents (as applicable), as a multiple of estimated calendar years 2023 and 2024 adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, for the applicable company.

31

Financial data of the selected publicly traded companies were based on public filings and publicly available Wall Street research analysts’ estimates published by FactSet as of January 16, 2024. Financial data of the Company was derived from the Management Forecasts and equity information provided by the management of the Company. The calendar year 2023 and 2024 enterprise value to EBITDA multiples observed for the selected publicly traded companies were as follows:

BofA Securities also calculated and compared the average last-twelve-months EBITDA multiples for the selected publicly traded companies as a group and for the Company, as of January 16, 2024, and (i) for calendar years 2019, 2020, 2021 and 2022, and (ii) for the one-year, three-year and five-year periods ending May 25, 2023, which represents the day prior to disclosure of Sun Pharma’s initial offer to acquire all of the Taro ordinary shares (the “Unaffected Date”). Financial data of the Company and the selected publicly traded companies in this review were based on public filings and publicly available Wall Street research analysts’ estimates published by FactSet as of January 16, 2024. The current and historical average last-twelve-months EBITDA multiples observed for the selected publicly traded companies as a group and for the Company were as follows:

Based on BofA Securities’ review of the enterprise values to adjusted EBITDA multiples observed for the selected publicly traded companies and on its professional judgment and experience, BofA Securities applied an adjusted EBITDA multiple reference range of 7.6x to 13.5x to the estimates of calendar year 2023 adjusted EBITDA for the Company as reflected in the Management Forecasts, and an adjusted EBITDA multiple reference range of 7.2x to 12.0x to the estimates of calendar year 2024 adjusted EBITDA for the Company as reflected in the Management Forecasts, to calculate a range of implied enterprise values for the Company. Additionally, based on BofA Securities’ review of the enterprise values to adjusted EBITDA multiples observed for the selected publicly traded companies, as well as historical last-twelve-months EBITDA multiples for the selected publicly traded companies and historical trading prices of Taro ordinary shares and the common stock of the selected publicly traded companies, and on its professional judgment and experience, BofA Securities applied an adjusted EBITDA multiple reference range of 4.2x to 7.5x to the estimates of calendar year 2023 adjusted EBITDA for the Company as reflected in the Management Forecasts, to calculate a range of implied enterprise values for the Company. BofA Securities then calculated an implied equity value per share reference range for the Company (rounded to the nearest $0.05) by adding to these ranges of implied enterprise values an estimate of the net cash of the Company of $1,295 million as of September 30, 2023, as provided by the management of the Company, and dividing the results by the number of fully-diluted Taro shares outstanding of 37.587 million (calculated on a treasury stock method basis, based on information provided by the management of the Company).

This analysis indicated the following approximate implied equity value reference ranges per share, as compared to the merger consideration, the closing price per Taro ordinary share as of January 16, 2024, the closing price per Taro ordinary share as of December 8, 2023, the day prior to disclosure of the revised offer price (the

32

“Revised Offer Unaffected Share Price”), and the closing price per Taro ordinary share as of the Unaffected Date (the “Unaffected Share Price”):

No selected publicly traded company used in this analysis is identical or directly comparable to the Company. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the public trading or other values of the companies to which the Company was compared.

Discounted Cash Flow Analysis

BofA Securities performed a discounted cash flow analysis of the Company to calculate a range of implied present values per Taro ordinary share utilizing estimates of the standalone, unlevered, after-tax free cash flows the Company was expected to generate over the period from September 30, 2023 through Taro’s fiscal year 2034 based on the Management Forecasts. BofA Securities calculated a terminal value for the Company by applying an assumed perpetuity growth rate range of negative 1.00% to 1.00%, reflecting guidance provided by the management of the Company, to the terminal year unlevered free cash flows. The unlevered free cash flows and the terminal values were discounted to September 30, 2023, utilizing mid-year discounting convention, and using discount rates ranging from 10.00% to 12.00%, which were based on an estimate of the Company’s weighted average cost of capital, derived using the capital asset pricing model. BofA Securities then calculated implied per share equity value reference ranges (rounded to the nearest $0.05) for the Company by (i) adding to this range of present values the net cash of the Company of $1,295 million as of September 30, 2023 and (ii) dividing the result by the number of fully-diluted Taro shares outstanding of 37.587 million (calculated on a treasury stock method basis, based on information provided by the management of the Company). This analysis indicated the following approximate implied equity value reference range per Taro ordinary share (rounded to the nearest $0.05) for the Company, as compared to the merger consideration, the closing price per Taro ordinary share as of January 16, 2024, the Revised Offer Unaffected Share Price, and the Unaffected Share Price:

Other Factors

BofA Securities also noted certain additional factors that were not considered part of BofA Securities’ financial analyses with respect to its opinion but were referenced solely for informational purposes, including, among other things the following:

Discounted Cash Flow Sensitivity Analysis. At the direction of and based on sensitivity inputs provided by the Special Committee, BofA Securities also performed a sensitivity analysis to analyze the implied impact on the approximate implied equity value reference range per Taro ordinary share derived from the Discounted Cash Flow analysis described above under the heading “Summary of Material Company Financial Analyses—

33

Discounted Cash Flow Analysis” by varying certain of the Management Forecasts as described in the table below. The following table presents the results of this analysis:

Discounted Cash Flow (Illustrative Sensitivity Scenario). At the direction of the Special Committee, BofA Securities performed the Discounted Cash Flow analysis described above under the heading “Summary of Material Company Financial Analyses—Discounted Cash Flow Analysis”, utilizing the Management Forecasts as revised at the direction of the Special Committee to reflect the following adjustments to Net Revenue growth and Adjusted EBITDA margin based on input provided by the Special Committee: Net Revenue Growth in years 2029 through 3034 of 2.9%, 2.6%, 2.3%, 2.0%, 1.7% and 1.3% respectively, and Adjusted EBITDA margin in years 2029 through 3034 of 10.3%, 10.2%, 10.1%, 10.0%, 9.8% and 9.7% respectively. The following table presents the results of this illustrative analysis:

52-Week Trading Range. BofA Securities reviewed the trading range of the Taro ordinary shares for the 52-week period ended May 25, 2023, which was $23.00 to $39.90.

Wall Street Analysts Price Targets. BofA Securities reviewed certain publicly available equity research analyst price targets for the Taro ordinary shares available as of January 16, 2024 which demonstrated a price of $35.00 and a present value of $31.50 when discounted by one year at the Company’s estimated mid-point cost of equity of 11.10%, derived using the capital asset pricing model.

Premia Calculations. BofA Securities reviewed, among other things, the premia paid in selected cash-only precedent public company acquisitions completed between February 4, 2014 and October 23, 2023, involving public target companies with a controlling shareholder holding more than 50% of the outstanding voting power of the company. The premia paid was calculated in relation to each target company’s (i) closing share price on the day prior to announcement of the applicable transaction (“Unaffected Price”), and (ii) 52-week high trading price for the 52-week period ended prior to announcement of the applicable transaction (“52-Week High”). The results of this review were as follows:

Based on this review and its professional judgment and experience, BofA Securities applied:

Other BofA Securities Materials

In addition to the presentation made to the Special Committee on January 17, 2024, the date on which BofA Securities delivered its opinion, as described above, BofA Securities made other presentations to the Special Committee on October 23, 2023, October 27, 2023, November 29, 2023, December 4, 2023 and December 6, 2023 (which are referred to collectively as the “Preliminary Presentation Materials”). Copies of the Preliminary Presentation Materials provided to the Special Committee by BofA Securities have been attached as exhibits to this proxy statement. None of the Preliminary Presentation Materials, alone or together, constitutes an opinion of BofA Securities with respect to the merger consideration, or otherwise.

The materials dated October 23, 2023 and filed as exhibit (c)(2) to this proxy statement included (a) a review of the Management Forecasts (which are summarized below under the caption “Special Factors—Certain Unaudited Prospective Financial Information”), and (b) a preliminary financial analysis of the Company based on the Management Forecasts, which was substantially similar to the financial analysis described above under “–Summary of Material Company Financial Analyses”, other than:

The materials dated October 27, 2023 and filed as exhibit (c)(3) to this proxy statement included a cost of capital analysis of each of the Company and Sun Pharma.

The materials dated November 29, 2023 and filed as exhibit (c)(4) to this proxy statement included an overview of the top 20 shareholders of the Company, including, among other things, each shareholder’s economic interest, voting power, market value and estimated cost basis.

The materials dated December 4, 2023 and filed as exhibit (c)(5) to this proxy statement included (a) an overview, based solely on publicly available information, of certain generic drug price fixing litigation, and (b) an overview of the Company’s and Sun Pharma’s settlement and loss contingency provision as reported by the Company and Sun Pharma in their annual reports to shareholders for the years 2021 through 2023.

The materials dated December 6, 2023 and field as exhibit (c)(6) to this proxy statement included (a) an overview, based solely on publicly available information, of Sun Pharma’s prior acquisitions, including the premia paid by Sun Pharma in relation to (i) each target company’s closing share price on the day prior to announcement of the applicable transaction, (ii) each target company’s 30-day average price per share on the day prior to announcement of the applicable transaction, (iii) each target company’s 52-week high trading price for the 52-week period ended prior to announcement of the applicable transaction, and (iv) Sun Pharma’s initial offer for each target company, (b) an overview of Sun Pharma’s prior offers to acquire the remaining shares of the Company, and (c) an overview based solely on publicly available information of the premiums or discounts paid in certain precedent minority squeeze outs since 2014.

The Preliminary Presentation Materials were for discussion purposes only and did not present any findings or make any recommendations or constitute an opinion of BofA Securities with respect to the fairness of the merger consideration or otherwise. The financial analyses performed by BofA Securities in relation to its opinion dated January 17, 2024 and filed as exhibit (c)(7) to this proxy statement, as described above under “–Summary of Material Company Financial Analyses”, superseded all analyses and information presented in the Preliminary Presentation Materials. Copies of the Preliminary Presentation Materials have been filed as exhibits to this proxy statement and will be made available for inspection and copying at the principal executive offices of the Company during regular business hours by any interested shareholder or such shareholder’s representative who has been so designated in writing at the address described in the section of this proxy statement titled “Where You Can Find More Information”.

Miscellaneous

As noted above, the discussion set forth above in the section entitled “Summary of Material Company Financial Analyses” represents a brief summary of the material financial analyses presented by BofA Securities to the Special Committee in connection with its opinion and is not a comprehensive description of all analyses.

34

undertaken or factors considered by BofA Securities in connection with its opinion. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to partial analysis or summary description. BofA Securities believes that its analyses summarized above must be considered as a whole. BofA Securities further believes that selecting portions of its analyses and the factors considered or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying BofA Securities’ analyses and opinion. The fact that any specific analysis has been referred to in the summary above is not meant to indicate that such analysis was given greater weight than any other analysis referred to in the summary.

In performing its analyses, BofA Securities considered industry performance, general business and economic conditions and other matters, many of which are beyond the control of the Company. The estimates of the future performance of the Company in or underlying BofA Securities’ analyses are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those estimates or those suggested by BofA Securities’ analyses. These analyses were prepared solely as part of BofA Securities’ analysis of the fairness, from a financial point of view, to the Minority Shareholders of the merger consideration to be received by the Minority Shareholders in the merger and were provided to the Special Committee in connection with the delivery of BofA Securities’ opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or acquired or the prices at which any securities have traded or may trade at any time in the future. Accordingly, the estimates used in, and the ranges of valuations resulting from, any particular analysis described above are inherently subject to substantial uncertainty and should not be taken to be BofA Securities’ view of the actual values of the Company or its shares.

The type and amount of consideration payable in the merger was determined through negotiations between the Special Committee and Sun Pharma, rather than by any financial advisor, and was approved by the Special Committee, the Audit Committee and the Board. The decision to enter into the merger agreement was that of the Special Committee, the Audit Committee and the Board. As described above, BofA Securities’ opinion and analyses were only one of many factors considered by the Special Committee in its evaluation of the merger and should not be viewed as determinative of the views of the Special Committee or the management of the Company with respect to the merger or the merger consideration.

The Company has agreed to pay BofA Securities for its services in connection with the merger an aggregate fee of $4.0 million, payable in quarterly installments of $1.0 million each. The engagement letter also provides for a $1.5 million fee payable upon the delivery of an opinion, which fee offsets the quarterly payments. Accordingly, BofA Securities was paid $1.0 million in early November 2023 and $1.5 million in January 2024, following the delivery its opinion, $0.5 million is payable in April 2024 and $1.0 million is payable in July 2024. The amount of fees payable to BofA Securities is not contingent upon the signing of the merger agreement or consummation of the merger. In addition, the Company has agreed to reimburse certain of BofA Securities’ expenses arising, and to indemnify BofA Securities against certain liabilities that may arise, out of BofA Securities’ engagement.

BofA Securities and its affiliates comprise a full-service securities firm and commercial bank engaged in securities, commodities and derivatives trading, foreign exchange and other brokerage activities, and principal investing as well as providing investment, corporate and private banking, asset and investment management, financing and financial advisory services and other commercial services and products to a wide range of companies, governments and individuals. In the ordinary course of their businesses, BofA Securities and its affiliates may invest on a principal basis or on behalf of customers or manage funds that invest, make or hold long or short positions, finance positions or trade or otherwise effect transactions in equity, debt or other securities or financial instruments (including derivatives, bank loans or other obligations) of the Company, Sun Pharma and certain of their respective affiliates.

BofA Securities and its affiliates in the past have provided, currently are providing, and/or in the future may provide, investment banking, commercial banking and other financial services to the Company and certain of its

35

affiliates and have received or in the future may receive compensation for the rendering of these services. From January 1, 2022 through December 31, 2023, BofA Securities and its affiliates derived aggregate revenues from the Company and certain of its affiliates of less than $200,000 for investment and corporate banking services unrelated to the merger.

In addition, BofA Securities and its affiliates in the past have provided, currently are providing, and/or in the future may provide, investment banking, commercial banking and other financial services to Sun Pharma and certain of its affiliates and have received or in the future may receive compensation for the rendering of these services, including having acted or acting as a lender under certain leasing facilities of Sun Pharma and/or certain of its affiliates. From January 1, 2022 through December 31, 2023, BofA Securities and its affiliates derived aggregate revenues from Sun Pharma and certain of its affiliates (other than the Company or any of its subsidiaries) of less than $200,000 for investment and corporate banking services.

Interests of Taro’s Executive Officers and Directors in the Merger

When considering the recommendation of Taro’s Board, you should be aware that the members of Taro’s Board and Taro’s executive officers have interests in the merger in addition to their interests as Taro shareholders. These interests may be different from, or in addition to, your interests as Taro shareholders. The members of the Special Committee, Taro’s Audit Committee and the Board were aware of these additional interests, and considered them when they approved the Transactions.

Security Ownership of Management and Directors. As of February 9, 2024, directors and executive officers of Taro and parties that may be deemed to be affiliated with directors and executive officers of Taro, other than Sun Pharma, did not own or have voting control over any ordinary shares. Dilip Shanghvi, as the Managing Director of Sun Pharma’s board of directors and along with entities controlled by him and members of his family, controls 54.5% of Sun Pharma, and Mr. Shanghvi may therefore be deemed to share voting and dispositive power over all 29,497,813 ordinary shares beneficially owned by Sun Pharma.

Indemnification and Insurance. The merger agreement provides that all rights of indemnification by us or any of our subsidiaries existing in favor of our and our subsidiaries’ current and former directors or officers for their acts and omissions as directors and officers of us and any of our subsidiaries occurring prior to the effective time of the merger, will survive the merger and be observed by the Surviving Company in the merger to the fullest extent available under the relevant indemnification documents and applicable law for a period of seven years from the effective date of the merger.

The merger agreement further provides that, following the merger, Taro agrees to maintain the directors’ and officers’ liability insurance policy currently in effect (or substitute such policy with a comparable policy), which provides coverage with respect to the acts and omissions of Taro officers and directors occurring prior to the effective time of the merger for a period of seven years following the merger; provided that Taro as the Surviving Company shall not be required to expend annually more than 250% of the current annual premiums paid by Taro for such coverage.

Compensation of the Special Committee. The members of the Special Committee did not receive any special compensation as a result of their serving on the Special Committee, however, they did receive per-meeting fees at the rate currently paid to members of committees of the Board.

Position of the Sun Pharma Entities as to Fairness of the Transactions

Under the SEC rules governing “going private” transactions, each of the Sun Pharma Entities may be deemed to be an affiliate of Taro and engaged in the going-private transaction and, therefore, are required to provide certain information regarding their position as to the fairness of the Transactions to the Minority Shareholders who will receive merger consideration in the merger. The Sun Pharma Entities are making the statements included herein solely for purposes of complying with such requirements of Rule 13e-3 and related rules and regulations under

36

the Exchange Act. The Sun Pharma Entities have interests in the merger that are different from, and/or in addition to, those of the Minority Shareholders by virtue of their continuing interests in Taro after the completion of the Transactions. The views of the Sun Pharma Entities should not be construed as a recommendation to any Taro shareholder as to how that shareholder should vote on the proposal to approve the Transactions.

The Sun Pharma Entities also believe that the interests of the Minority Shareholders were properly represented by the Special Committee, which negotiated the terms and conditions of the merger agreement on behalf of the Minority Shareholders with the assistance of its independent legal and financial advisors. The Sun Pharma Entities neither participated in the deliberations of the Special Committee regarding, nor received advice from the Special Committee’s independent legal or financial advisors as to the substantive or procedural fairness of the merger. The Sun Pharma Entities have not performed, or engaged a financial advisor to perform, any valuation or other analysis for the purpose of assessing the fairness of the merger to the Minority Shareholders.

Based on the factors considered by, and findings of, the Board, the Audit Committee and the Special Committee described in the sections titled “Special Factors—Recommendations of the Special Committee, the Audit Committee and the Board; Fairness of the Transactions,” beginning on page 20 and (which analyses the Sun Pharma Entities collectively adopt), the Sun Pharma Entities believe that the merger is substantively and procedurally fair to the Minority Shareholders. The Sun Pharma Entities believe the factors considered by, and findings of, the Board and the Special Committee provide a reasonable basis upon which to form their belief that the merger is fair to the Minority Shareholders.

The Sun Pharma Entities believe that the Transactions are substantively and procedurally fair to the Minority Shareholders. In particular, the Sun Pharma Entities considered the following substantive factors based on, among other things, the following factors:

37

38

Purposes and Effects of the Merger; Reasons for the Merger

The Sun Pharma Entities’ Purpose and Reasons

The Sun Pharma Entities’ purpose and reasons for engaging in the merger is to increase Sun Pharma’s indirect ownership through its affiliates of ordinary shares from their position of approximately 78.5% of the outstanding shares to approximately 100%. Upon completion of the merger, Taro will become indirectly substantially wholly owned by Sun Pharma and its affiliates.

Currently, the director appointees of Sun Pharma constitute the majority of the directors of the Company. Sun Pharma and its affiliates periodically review and evaluate Taro and the advantages and disadvantages of Taro being a publicly traded company. Following their latest review, in May 2023, Sun Pharma and its affiliates concluded that it would be best for Taro to delist its shares from the NYSE and operate as a privately held entity in order to allow Taro greater operational flexibility and to focus on its long-term growth and continuing improvements to its business without the constraints and distractions caused by the public equity market’s valuation of its ordinary shares and related reporting requirements.

The benefits expected to be achieved by delisting Taro’s ordinary shares will accrue whenever such delisting is achieved. The Sun Pharma Entities believe that Taro does not benefit meaningfully from being a public company and that consequently, the significant legal, accounting and other costs and expenses incurred by Taro by virtue of being a public company are unnecessary and detrimental to Taro’s business. The Sun Pharma Entities believe that Taro’s resources (including its managers’ time) that have historically been used to meet Taro’s reporting and other obligations arising from its status as a public company will be much better deployed on matters directly related to Taro’s business.

In addition, the Sun Pharma Entities believe that the merger will provide Taro with additional capabilities, including access to Sun Pharma’s research and development resources, which will assist with improving its product pipeline, and the Sun Pharma Entities believe that, in light of a growing trend in company consolidations in the generic pharmaceutical market, Sun Pharma will benefit from acquiring Taro by being able to share a wider variety of product potential and customer base.

The goal of the Transactions is to have Taro become an indirectly owned subsidiary of Sun Pharma, and under Israeli law, this typically is accomplished by either a merger or a tender offer. The transaction is structured as a merger, which requires (i) approval of the Audit Committee and the Board, (ii) the affirmative vote of at least 75% of the total voting power of Taro present (in person or by proxy) and voting at the extraordinary general meeting, including at least a majority of the total voting power held by the Minority Shareholders present (in person or by proxy) and voting at the extraordinary general meeting, unless the total voting power held by the Minority Shareholders and voting against the merger does not exceed 2% of the total voting power of the Company; (iii) the affirmative vote of at least 75% of the Taro ordinary shares present (in person or by proxy) and voting at the ordinary class meeting; and (iv) the affirmative vote of at least 75% of the Founder Shares present (in person or by proxy) and voting at the founders class meeting. If the transaction had been structured as a tender offer, it would not have required approval of the Audit Committee or the Board, but Sun Pharma would have had to achieve ownership of at least 95% of Taro ordinary shares by way of the tender offer in order to complete the going-private transaction. Sun Pharma decided that it preferred the merger route for the transaction and therefore proposed this transaction to the Board. Sun Pharma decided to undertake the going-private transaction at this time because the costs and challenges with operating the Company as a separate public company have become more acute overtime and Sun Pharma wants to take advantage of the Company being a privately held company as described above as expeditiously as possible. In addition, Sun Pharma believes that pursuing this merger is an advisable way to use its current available liquidity.

39

Effects of the Merger

As a result of the proposed merger, all Taro ordinary shares, other than ordinary shares held by the Interested Shareholders, will be converted solely into the right to receive $43.00 per share, without interest, and will be canceled and cease to exist.

Sun Pharma and its affiliates, as the owners of Taro (the surviving entity in the merger) and its business following the completion of the merger, will be the only beneficiaries of any earnings and growth of Taro following the proposed merger.

The primary benefit of the merger to the Minority Shareholders will be the right of such shareholders to receive a cash payment of $43.00 for each ordinary share held by the Minority Shareholders.

The primary detriment of the merger to the Minority Shareholders is that following the merger, the Minority Shareholders will not have an interest in Taro or in its potential future earnings, growth or value. Additionally, the receipt of cash in exchange for Taro ordinary shares pursuant to the merger will be a taxable transaction to our shareholders who exchange our ordinary shares for the cash merger consideration.

Upon completion of the proposed merger, the ordinary shares of Taro will cease to be listed on the New York Stock Exchange, will not be publicly traded and will be deregistered under the Exchange Act. Sun Pharma and its affiliates will together have an ownership interest of approximately 100% in the surviving corporation’s net book value and net income or loss and the other current shareholders of Taro will have no direct or indirect interest in that net book value and net income or loss.

The table below sets forth the direct and indirect interests in the Company’s net book value and net earnings of Sun Pharma and its affiliates prior to and immediately after the proposed merger based on the net book value on June 30, 2023, September 30, 2023, and December 31, 2023, and net earnings for the three months ended June 30, 2023, the six months ended September 30, 2023, and the nine months ended December 31, 2023.

40

Financing of the Merger

The total amount of funds required to complete the merger (excluding related fees and expenses) is estimated to be approximately $348 million. Such funds will be funded by Sun Pharma, Alkaloida, TDC and/or SPH from their cash or cash equivalents on hand at the time the Merger is completed. The Merger is not conditioned on any financing arrangements.

No Appraisal Rights

Under Israeli law, our shareholders are not entitled to appraisal rights in connection with the merger.

Litigation Relating to the Merger

We are not aware of any litigation related to the merger as of the current time.

Anticipated Accounting Treatment of the Merger

Because the ownership and control (both voting and economic) of Taro, as the surviving corporation of the merger, is and will be substantially the same both before and after the merger, there will be no effect on its financial statements as a result of the merger. Accordingly, the historical book values of Taro’s assets and liabilities will not change and will be carried over in the accounts at their basis prior to the merger.

Material United States Federal Income Tax Considerations of the Merger

The following discussion describes the material U.S. federal income tax consequences of the merger generally applicable to U.S. Holders, as defined below. This discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), final, temporary and proposed Treasury regulations promulgated thereunder, administrative and judicial interpretations thereof, and the treaty between the governments of the United States and Israel with respect to taxes on income (the “Treaty”), all as of the date hereof and all of which are subject to differing interpretations or change, possibly with retroactive effect. This discussion assumes that Taro is not and has not been a passive foreign investment company for U.S. federal income tax purposes, which Taro believes to be the case. This discussion does not consider all aspects of U.S. federal income taxation that may be relevant to particular U.S. Holders by reason of their particular circumstances, and it does not address any other U.S. federal tax considerations (such as alternative minimum taxes, the Medicare tax on net investment income, and estate or gift taxation) or any aspect of U.S. state or local or non-U.S. tax laws. No ruling has been or will be sought from the U.S. Internal Revenue Service (the “IRS”), and no opinion of counsel has been or will be rendered as to the U.S. federal income tax consequences of the merger. There can be no assurance that the IRS will not disagree with or challenge any of the consequences described below, or that such consequences, if challenged, will be upheld by a court.

This discussion is limited to U.S. Holders that hold their Taro ordinary shares as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment), who do not have a permanent establishment in Israel and who have not been present in Israel for a period or periods of 183 days or more in the aggregate during the taxable year in which the merger occurs. In addition, this discussion does not address the considerations that may be applicable to U.S. Holders who are subject to special rules under the U.S. federal income tax law, including (without limitation) U.S. Holders who (i) acquired their Taro ordinary shares pursuant to the exercise of employee stock options or otherwise as compensation, (ii) are insurance companies, banks, dealers or brokers in securities or currencies, traders in securities that elect to use a mark-to-market method of tax accounting, former citizens or long-term residents of the United States, tax-exempt organizations, personal holding companies, corporations that accumulate earnings to avoid U.S. federal income tax, tax-qualified retirement plans, individual retirement accounts, regulated investment companies, real estate investment trusts, or

41

financial institutions, (iii) hold Taro ordinary shares as part of a “straddle,” “hedge,” “conversion” or other risk-reduction transaction, (iv) directly, indirectly or constructively own or have owned Taro ordinary shares representing 10% or more of the shares of Taro (by vote or value), (v) own Taro ordinary shares through a partnership or other pass-through entity, or (vi) own, directly or constructively, any outstanding shares of Sun Pharma stock.

For purposes of this discussion, a U.S. Holder is a beneficial owner of Taro ordinary shares who, for U.S. federal income tax purposes, is (i) an individual who is a citizen or resident of the United States, (ii) a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate, the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust if it (1) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (2) has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person.

If a partnership (or other entity or arrangement classified as a partnership for U.S. federal income tax purposes) holds Taro ordinary shares, the U.S. federal income tax treatment of a partner of such partnership generally will depend upon the status of such partner and the activities of the partnership. Partners of partnerships holding Taro ordinary shares should consult their own tax advisors regarding the specific tax consequences of the merger to them.

TARO SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE MERGER TO THEM, INCLUDING THE EFFECTS OF APPLICABLE U.S. STATE OR LOCAL, NON-U.S. INCOME OR OTHER TAX LAWS AND POSSIBLE CHANGES IN THE TAX LAWS.

The receipt by a U.S. Holder of cash in connection with the merger will be a taxable transaction for U.S. federal income tax purposes. Generally, for U.S. federal income tax purposes, a U.S. Holder will recognize capital gain or loss equal to the difference between the amount of cash paid to such U.S. Holder (including the amount of any Israeli income tax deducted and withheld from such consideration) pursuant to the merger and the aggregate adjusted tax basis of the shares surrendered by it in the merger. If a U.S. Holder acquired different blocks of Taro ordinary shares at different times, gain or loss will be calculated separately for each block of Taro ordinary shares surrendered pursuant to the merger. A U.S. Holder’s adjusted tax basis in its Taro ordinary shares generally will equal the price paid by it for such shares.

Any gain or loss recognized by a U.S. Holder will be long-term capital gain or loss if the U.S. Holder’s holding period in the Taro ordinary shares surrendered exceeds one year as of the effective date of the merger and will be short-term capital gain or loss if the U.S. Holder’s holding period in the Taro ordinary shares is one year or less as of the effective date of the merger. If a U.S. Holder acquired different blocks of Taro ordinary shares at different times, such U.S. Holder must determine its holding period separately for each block of Taro ordinary shares. In the case of a non-corporate U.S. Holder, long-term capital gains are subject to U.S. federal income tax at preferential rates. Certain limitations apply to the use of capital losses.

As discussed below (see “Material Israeli Income Tax Consequences of the Merger”), the gross amount of cash that a U.S. Holder would be entitled to receive in connection with the merger may be subject to Israeli withholding tax. A U.S. Holder is generally entitled to use foreign tax credits to offset only the portion of its U.S. federal income tax liability attributable to foreign source income. For foreign tax credit purposes, gain or loss recognized by a U.S. Holder as a result of the merger will generally be U.S.-source gain or loss and passive category income. Accordingly, a U.S. Holder may be unable to claim a foreign tax credit for all or a portion of any Israeli withholding tax imposed on the cash paid to such U.S. Holder pursuant to the merger unless such U.S. Holder has foreign source income or gain in the same

42

foreign tax credit category from other sources. Moreover, special rules under Israeli domestic tax law and the Treaty (see “Material Israeli Income Tax Consequences of the Merger”) that may allow a U.S. Holder to claim an exemption from Israeli withholding tax may impact such U.S. Holder’s ability to claim a foreign tax credit with respect to any such Israeli withholding tax. The rules governing foreign tax credits are complex. U.S. Holders are urged to consult their own tax advisors regarding the ability to claim a foreign tax credit and the application of the Treaty.

Certain U.S. Holders of Taro ordinary shares may be subject to information reporting to the IRS and may be subject to backup withholding on amounts received pursuant to the merger. Backup withholding will not apply, however, to a U.S. Holder who (i) furnishes a current taxpayer identification number and certifies that the U.S. Holder is not subject to backup withholding on IRS Form W-9 or a substantially similar substitute form or (ii) is otherwise exempt from backup withholding. The amount of any backup withholding is not an additional tax and may be refunded or credited against the U.S. Holder’s U.S. federal income tax liability, provided that such U.S. Holder timely furnishes the required information to the IRS.

THE SUMMARY OF MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES SET FORTH ABOVE IS FOR GENERAL INFORMATION ONLY AND IS BASED ON THE LAW IN EFFECT ON THE DATE HEREOF. SHAREHOLDERS ARE STRONGLY URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY U.S. STATE OR LOCAL OR NON-U.S. INCOME AND OTHER TAX LAWS) OF THE MERGER.

Material Israeli Income Tax Consequences of the Merger

The following is a summary discussion of Israeli tax consequences of the merger for Taro shareholders. The following summary is included for general information purposes only, and is based upon Israeli tax law in effect as of the date of this proxy statement. No opinion of counsel has been or will be sought with respect to this summary, and no assurance can be given that that the views presented herein will be accepted by the tax authorities or the court, or that new or future legislation, regulations or interpretations will not significantly change the tax consequences described below, and any such change may apply retroactively. This discussion does not discuss all material aspects of Israeli tax consequences which may apply to particular holders of Taro ordinary shares in light of their particular circumstances, such as investors subject to special tax rules or other investors referred to below. Because individual circumstances may differ, holders of Taro ordinary shares should consult their tax advisors as to the Israeli tax consequences applicable to them.

The below discussion is not intended to be a complete analysis or description of all potential tax consequences of the merger.

Generally, under the Israeli Income Tax Ordinance [New Version], 1961, as amended, and the rules and regulations promulgated thereunder (the “Israeli Tax Ordinance”), the disposition of shares of an Israeli company is generally deemed to be a sale of capital assets unless such shares were held for the purpose of trading. The Israeli Tax Ordinance generally imposes a capital gains tax on the sale of capital assets located in Israel, including shares in Israeli resident companies (such as Taro), by both residents and non-residents of Israel, unless a specific exemption is available or unless a double taxation prevention treaty between Israel and the country of the non-Israeli resident provides otherwise.

Inflationary surplus is a portion of the total capital gain which is equivalent to the increase in the relevant asset’s cost base that is attributable to the increase in the Israeli consumer price index or, in certain circumstances, a foreign currency exchange rate, between the date of purchase and the date of disposition. Inflationary surplus attributed to the period after December 31, 1993 is not currently subject to tax in Israel.

43

For individual shareholders, the tax rate applicable to real capital gains (i.e., the capital gain less the inflationary surplus) derived on or after January 1, 2012, is generally 25%. However, if the shareholder has claimed a deduction for financing expenses in connection with the shares or if such shareholder is considered a “material shareholder” at any time during the 12-month period preceding such sale (i.e., the shareholder holds directly or indirectly, alone or together with another, at least 10% of any means of control in the company), the tax rate will be 30%. “Means of control” generally includes the right to vote, receive profits, nominate a director or an executive officer, receive assets upon liquidation, or order someone who holds any of the aforesaid rights how to act, regardless of the source of such right. “Together with another” means together with a related party or together with a person who is not a related party, if the shareholder and such other person regularly, directly or indirectly, cooperate by agreement on substantive matters relating to Taro. If the selling individual is subject to a specific tax treatment (such as traders in securities) then such gain is taxed as ordinary income. Individuals who are subject to tax in Israel (whether any such individual is an Israeli resident or a non-Israeli resident) are also subject to an excess tax at the current rate of 3% on annual taxable income (from all sources including, but not limited to, capital gains, interest, and dividends) exceeding NIS 721,560 in 2024 which threshold is linked to the annual change in the Israeli consumer price index. Generally, companies are subject to tax on real capital gains derived from the sale of shares at the ordinary corporate rate (currently 23%). Notwithstanding the above, different tax consequences may apply to: (i) dealers in securities, (ii) shareholders who acquired their shares prior to the initial public offering and (iii) other shareholders with specific tax regimes. We also note that the actual capital gains tax rates which may apply to individual Taro shareholders on the sale of Taro shares may be effectively higher or lower than the rates mentioned above based on various factors applicable to such shareholder.

Notwithstanding the foregoing, according to the Israeli Tax Ordinance, non-Israeli residents are generally exempt from Israeli capital gains tax on any gains derived from the disposition of shares in an Israeli corporation publicly traded on a recognized stock exchange outside of Israel (such as the Taro ordinary shares), provided, among other things, that such gains are not attributed to a permanent establishment of such shareholders maintained in Israel, and that such shareholders are not subject to the Inflationary Adjustments Law, and provided further that such shareholders did not acquire their shares prior to the issuer’s initial public offering. However, non-Israeli corporations (and other non-corporate entities) will not be entitled to such exemption if Israeli residents (i) possess, directly or indirectly, alone or “together with another”, 25% or more in any of the “means of control” in such non-Israeli corporation, or (ii) are the beneficiaries of or are entitled to 25% or more of the revenues or profits of such non-Israeli corporation, whether directly or indirectly.

Pursuant to a treaty between the governments of the United States and Israel with respect to taxes on income, the sale, exchange or disposition of our ordinary shares by a person who qualifies as a resident of the United States under the treaty and who is entitled to claim the benefits afforded to him by the treaty, will generally not be subject to Israeli capital gains tax. However, this exemption will not apply if (i) such U.S. resident holds, directly or indirectly, shares representing 10% or more of the voting power in our company during any part of the 12-month period preceding the sale, exchange or disposition, subject to certain conditions, (ii) the shareholder, if an individual, has been present in Israel for a period or periods of 183 days or more in the aggregate during the applicable taxable year; or (iii) the capital gains from such sale, exchange or disposition can be attributed to a permanent establishment maintained in Israel. In any such case, the sale, exchange or disposition of ordinary shares would be subject to Israeli tax, to the extent applicable and subject to the general exemption for non-Israeli residents described above. YOU ARE URGED TO CONSULT WITH YOUR OWN TAX ADVISOR REGARDING THE APPLICABILITY OF ANY TAX TREATY TO YOU AND YOUR RECEIPT OF MERGER CONSIDERATION.

Our shareholders who acquired their shares prior to our initial public offering, and who do not qualify for an exemption from Israeli capital gains tax under the Israeli Tax Ordinance or an applicable tax treaty to which the State of Israel is a party, including the treaty between the governments of the United States and Israel described

44

above, may be subject to Israeli capital gains tax on the disposition of their ordinary shares in the merger. SUCH SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE TAX CONSEQUENCES OF THE MERGER TO THEM.

The payment of the consideration may be subject to the withholding of Israeli tax at the source with respect to certain categories of shareholders. If the Withholding Ruling is obtained, it is expected that you will be required to provide certain declarations regarding your status and shareholdings (together with supporting documents which may include (but are not limited to) copies of your passport, certificate of incorporation, residency certificate from the tax authority in the residency jurisdiction, etc.) for the purposes of evaluating the applicability of Israeli withholding tax, which we expect that will be included in the letter of transmittal we will provide following the completion of the merger. Shareholders who hold their shares in “street name” through a broker, bank or other nominee should contact such broker, bank or other nominee or their independent tax advisor regarding any documentation or other requirements that will need to be satisfied in order to establish an exemption from Israeli withholding tax that may be available pursuant to the Withholding Ruling or otherwise.

A detailed semi-annual return, including a computation of the tax due, must be filed, and an advance payment must be made, on January 31 and July 30 of each tax year for sales of securities traded on a stock exchange made within the previous six months. However, if all tax due was withheld at the source according to applicable provisions of the Israeli Tax Ordinance, this return does not need to be filed. Capital gains are also required to be reported in an annual income tax return.

Israeli Tax Rulings

The merger agreement provides that the Paying Agent, the Israeli Paying Agent, the Section 102 Trustee, Parent, Alkaloida, TDC, SPH and the Surviving Company shall be entitled to deduct and withhold from any consideration such amounts that are required to be deducted or withheld therefrom or in connection therewith under Israeli tax law unless a withholding tax exemption certificate obtained from the ITA is provided or the requirements of the Withholding Ruling (if obtained) described below, are satisfied. In order to obtain a withholding exemption certificate an application for an exemption under a tax treaty or under certain provisions of the Israeli Tax Ordinance needs to be filed to the ITA and the ITA is required to pre-approve the application.

Sun Pharma and Taro has filed with the ITA an application for a ruling that will either (1) exempt the Sun Pharma Entities and their affiliates, the paying agent, and the Israeli paying agent from the obligation to withhold Israeli tax at source from any consideration payable or otherwise deliverable as part of the merger consideration, or clarify that no such obligation exists; or (2) clearly instruct the Sun Pharma Entities and their affiliates, the paying agent, or the Israeli paying agent how such withholding of Israeli tax at source is to be executed, and, in particular, with respect to the classes or categories of holders or former holders of Taro shares from which tax is to be withheld (if any), and the rate or rates of withholding to be applied (the “Withholding Ruling”).

There is no assurance that the Withholding Ruling will be obtained, and if obtained, what will be its terms and conditions. Receipt of the Withholding Ruling is not a condition for closing the merger. Taro expects that such ruling will be issued prior to the closing of the merger, but there can be no assurance that this will, in fact, be the case. If the Withholding Ruling is not issued, then the Sun Pharma Entities, the paying agent or the Israeli paying agent, when paying the merger consideration to Taro shareholders, will not have the benefit of the instructions expected to be included in such ruling of the ITA. In this case, the Sun Pharma Entities, the paying agent or the Israeli paying agent may be required to withhold Israeli tax at the rates set by the Israeli Tax Ordinance from Taro shareholders unless they are presented with a withholding certificate providing for an exemption or a different withholding rate, issued by the ITA. If the Withholding Ruling is not obtained and if a person does not obtain an exemption certificate from the ITA prior to the payment of the merger consideration, and the Sun Pharma

45

Entities, the paying agent or the Israeli paying agent withholds Israeli tax from the merger consideration in respect of a person who is exempt from Israeli capital gains tax pursuant to the income treaty between the United States and Israel or under Israeli domestic law, such person may generally apply to the Israeli tax authorities for a refund of such withholding tax by filing a tax return.

Please note that specific rules may apply with respect to Taro ordinary shares that are subject to tax pursuant to Section 102 of the Ordinance.

THE SUMMARY OF MATERIAL ISRAELI INCOME TAX CONSEQUENCES SET FORTH ABOVE IS FOR GENERAL INFORMATION ONLY AND IS BASED ON THE LAW IN EFFECT ON THE DATE HEREOF. NO OPINION OF COUNSEL HAS BEEN OR WILL BE SOUGHT WITH RESPECT TO THIS SUMMARY, AND NO ASSURANCE CAN BE GIVEN THAT NEW OR FUTURE LEGISLATION, REGULATIONS OR INTERPRETATIONS WILL NOT SIGNIFICANTLY CHANGE THE TAX CONSEQUENCES DESCRIBED ABOVE, AND ANY SUCH CHANGE MAY APPLY RETROACTIVELY. THIS DISCUSSION DOES NOT DISCUSS ALL MATERIAL ASPECTS OF ISRAELI TAX CONSEQUENCES WHICH MAY APPLY TO PARTICULAR HOLDERS OF TARO ORDINARY SHARES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, SUCH AS INVESTORS SUBJECT TO SPECIAL TAX RULES OR OTHER INVESTORS REFERRED TO ABOVE. SHAREHOLDERS ARE STRONGLY URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY FOREIGN INCOME AND OTHER TAX LAWS) OF THE MERGER.

Provisions for Minority Shareholders

No provision has been made to grant the Minority Shareholders access to the corporate files of the Sun Pharma Entities or Taro or to obtain counsel or appraisal services at their expense.

Estimated Fees and Expenses

The estimated fees and expenses* incurred or expected to be incurred by Taro in connection with the proposed merger are as follows:

Plans for Taro after the Merger

It is expected that, upon completion of the merger, the operations of Taro will be conducted substantially as they currently are being conducted, except that the ordinary shares of Taro will cease to be listed on the NYSE, will not be publicly traded and will be deregistered under the Exchange Act, and Taro will be indirectly substantially wholly owned by Sun Pharma and its affiliates.

Under the terms of the merger agreement, the directors of Merger Sub will serve as directors of Taro following completion of the merger, and thereafter Sun Pharma expects that the directors of Taro will be comprised of persons affiliated with Sun Pharma. It is further contemplated that the officers of Taro immediately prior to the completion of the merger will continue to serve as officers following completion of the merger, in each case until their respective successors are duly elected or appointed or until the earlier of their death, resignation or removal.

46

The Sun Pharma Entities do not have any current plans or proposals that relate to, or would result in, an extraordinary corporate transaction following completion of the merger involving Taro’s corporate structure, business or management, such as a merger, reorganization, liquidation, relocation of any operations or sale or transfer of a material amount of assets. The Sun Pharma Entities expect, however, that following the merger they will evaluate and review Taro’s business and operations and may develop new plans and proposals that they consider appropriate to maximize the value of Taro after the merger (including in relation to further integrating Taro with Sun Pharma’s other businesses). The Sun Pharma Entities expressly reserve the right to make any changes they deem appropriate in light of their evaluation and review or in light of future developments.

Certain Unaudited Prospective Financial Information

Important Information about the Long-term Financial Model

Taro management does not, as a matter of course, make available to the public future financial projections. However, in connection with the Special Committee, the Audit Committee and the Board of a potential acquisition of Taro by Sun Pharma, Taro’s management prepared and provided to the Special Committee, the Audit Committee, the Board and BofA Securities, certain non-public unaudited prospective financial information regarding Taro’s projected future financial performance for Taro’s fiscal years 2024 through 2029 (Taro’s fiscal year ends on March 31, and its 2024 fiscal year ends on March 31, 2024) The methodology for projecting Taro’s performance for the outer years (fiscal years 2029 through 2034) of the Long-term Financial Model was derived by extrapolating Taro management’s financial model, including growth and margin trends. The Long-term Financial Model was approved by the Special Committee for BofA Securities’ use and reliance in connection with its financial analysis and opinion as more fully described in the section of this proxy statement entitled “Special Factors—Opinion of the Special Committee’s Financial Advisor.” Taro has included below a summary of the Long-term Financial Model solely for the purpose of providing its shareholders access to certain non-public unaudited prospective information considered by the Special Committee, the Audit Committee and the Board in evaluating the merger.

The summary of the Long-term Financial Model set forth below in this proxy statement is not being included to influence your decision on whether to vote for the Transactions and should not be regarded as an indication that Taro, the Special Committee or any recipient of the Long-term Financial Model considered, or now considers, them to be necessarily predictive of actual future results, and they should not be relied upon as such. The Long-term Financial Model summarized in this proxy statement are forward-looking statements. See “Caution Regarding Forward-Looking Statements.” and “Item 3. Key Information—D. Risk Factors” included in the Company’s annual report on Form 20-F for the fiscal year ended March 31, 2023, incorporated by reference into this proxy statement.

Although they are presented with numerical specificity, the Long-term Financial Model is subjective in many respects and reflects numerous estimates and assumptions that are inherently uncertain, many of which are beyond Taro’s control and difficult to predict, including estimates and assumptions regarding industry performance, general business, economic, regulatory, market and financial conditions and other future events, as well as matters specific to Taro’s business. Important factors that may affect actual results and cause the Long-term Financial Model not to be accurate include, but are not limited to, risks and uncertainties relating to Taro’s business (including its ability to achieve strategic goals, objectives and targets over the applicable periods), industry performance, the regulatory environment, general business and economic conditions, competition and the protection and enforcement of intellectual property rights. The Long-term Financial Model also reflects numerous variables, expectations and assumptions available at the time they were prepared as to certain business decisions that are subject to change. In addition, the Long-term Financial Model does not reflect any events that could affect Taro’s prospects, changes in general business or economic conditions or any other transaction or event that has occurred since, or that may occur and that was not anticipated at, the time the Long-term Financial Model was prepared, including the announcement of the potential acquisition of Taro by Sun Pharma pursuant to the merger agreement. Further, the Long-term Financial Model does not take into account the effect of any failure of the merger to occur, and should not be viewed as necessarily accurate or continuing in that context. The Long-term Financial Model covers multiple years and by its nature becomes less meaningful and predictive with each successive year. As a result, actual results may differ materially from those contained in the Long-term Financial Model.

The Long-term Financial Model is not to be considered in isolation or in lieu of Taro’s operating and other financial information prepared in accordance with GAAP and should be read together with Taro’s historical financial statements and the other information regarding Taro contained elsewhere or referenced in this proxy statement. The Long-term Financial Model was not prepared with a view toward public disclosure, nor was it prepared with a view toward compliance with published guidelines of the SEC or GAAP. Neither Taro’s independent accounting firm nor any other independent accountant has compiled, examined or performed any procedures with respect to the prospective financial information contained in the Long-term Financial Model, nor have they expressed any opinion or given any form of assurance on the Long-term Financial Model or their respective achievability, and accordingly assume no responsibility for them. There can be no assurance that any projections will be realized, or that the assumptions on which they are based will prove to be correct. The Long-term Financial Model does not and should not be read to update, modify or affirm any prior financial guidance issued by Taro. You are cautioned not to place undue reliance on this information in making a decision as to whether to vote to adopt the merger agreement.

The Long-term Financial Model includes non-GAAP financial measures, including Adjusted EBITDA, Tax-Effected Adjusted EBIT and Unlevered Free Cash Flow. Please see the tables below for a description of how Taro defines these non-GAAP financial measures. Taro believes that such non-GAAP financial measures provide information useful in assessing operating and financial performance across periods. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in accordance with GAAP, and non-GAAP financial measures used by Taro may not be comparable to similarly titled measures used by other companies.

The Long-term Financial Model assumes that (i) Taro continues to operate on an as-is basis, (ii) balance sheet cash and debt as per Taro management as of September 30, 2023, and (iii) a debt-like item relating to the Board-approved Litigation Loss Contingency Amount for the Pending Litigation that Taro could incur, equal to the amount accrued on to Taro’s balance sheet for fiscal year ending March 31, 2023 of approximately $141 million, which, per Taro management, remained unchanged as of September 30, 2023. For purposes of extrapolating Taro management’s financial model through fiscal year 2034, the Long-term Financial Model assumes Net Revenue Growth in fiscal years 2029 through 2034 of 3.9%, 3.6%, 3.3%, 3.0%, 2.7% and 2.3%, respectively, and Adjusted EBITDA margin in fiscal years 2029 through 2034 of 12.1%, 12.0%, 11.9%, 11.8%, 11.7% and 11.5%, respectively.

47

Set forth below is a summary of the Long-term Financial Model.

Long-term Financial Model

FY 2024–2034E

48

THE MERGER AGREEMENT

The following describes the material terms of the merger agreement. This description of the merger agreement is qualified in its entirety by reference to the full text of the merger agreement which is attached as Appendix A to this proxy statement and is incorporated herein by reference. The merger agreement has been included to provide you with information regarding its terms. We encourage you to read the entire merger agreement. The merger agreement is not intended to provide any other factual information about us. Such information can be found elsewhere in this proxy statement and in the other public filings Taro makes with the SEC, which are available without charge at www.sec.gov.

The Merger

Following the satisfaction or waiver of all of the conditions to completion of the merger contained in the merger agreement, including the approval of the Transactions by the shareholders of Taro, Merger Sub, a company under the control of Sun Pharma and a wholly owned subsidiary of Alkaloida, TDC and SPH, will merge with and into Taro, with Taro continuing as the Surviving Company and as an indirect wholly owned subsidiary of Sun Pharma and its affiliates. Pursuant to the merger, Taro, as the Surviving Company, will succeed to and assume all of the rights, properties and obligations of Merger Sub.

Effective Time

The parties are required, in accordance with Israeli law, to deliver to the Companies Registrar of the State of Israel (which we refer to as the “Companies Registrar”), a merger proposal with respect to the merger. Under Israeli law, the effective time of the merger and the issuance of the certificate of merger may occur no earlier than the later of: (i) 50 days following the delivery of the merger proposal to the Companies Registrar and (ii) 30 days following the approval of the Transactions by the shareholders of Taro and Merger Sub. Therefore, assuming Taro shareholder approval of the Transactions occurs on the date of the meetings, the effective time of the merger may occur no earlier than     , 2024. Before the closing of the merger, the parties will deliver a notice to the Companies Registrar informing the Companies Registrar that the Transactions were approved by the shareholders of Taro and Merger Sub. Such notice must be delivered no later than three days from the date of the approvals. The Merger will become effective in the manner provided in Section 323 of the Companies Law and as promptly as practicable after the satisfaction of the conditions for completion of the merger set forth in the merger agreement. If the Transactions are approved at the meetings, we expect the Transactions to close no earlier than the second quarter of 2024.

The parties are working to complete the merger as quickly as possible. However, the merger is subject to various closing conditions. No assurances can be given that the parties will obtain the necessary approvals or that the parties will obtain them in a timely manner.

Merger Consideration

If the merger is completed, each outstanding ordinary share of Taro not held by Sun Pharma and any of its affiliates, Taro and any subsidiary of Taro will automatically be converted into and represent solely the right to receive $43.00 in cash, without interest and less any applicable withholding tax.

After the merger is completed, you will have the right to receive the merger consideration, but you will no longer have any rights as a Taro shareholder and will have no rights as a shareholder of Sun Pharma, Alkaloida, TDC or SPH. You will receive written instructions from the paying agent appointed by Sun Pharma for sending in your share certificates and receiving the cash consideration to which you will be entitled.

If the merger is completed, all shares of Merger Sub outstanding immediately prior to the effective time of the merger will be cancelled and cease to exist and no consideration will be delivered in exchange for such shares.

49

Payment Procedures

Prior to the effective time of the merger, Sun Pharma will appoint a paying agent reasonably acceptable to Taro (which paying agent will use a local Israeli nationally recognized sub-paying agent reasonably acceptable to Taro) who will make payments to you of the merger consideration upon your proper surrender of your ordinary shares or upon receipt by the paying agent of an “agent’s message” in the case of ordinary shares held in “street name” through a broker, bank or other nominee. As of the effective time of the merger, Alkaloida, TDC and SPH will have deposited or caused to be deposited with (i) the paying agent or the Israeli sub-paying agent, an amount of cash sufficient to pay the merger consideration to each of our shareholders entitled to the merger consideration (other than the applicable portion thereof payable to holders of shares issued and subject to tax under Section 102 of the Israeli Income Tax Ordinance, and the rules and regulations promulgated thereunder, as may be amended from time to time, including any publications and clarifications issued by the Israeli Tax Authority and held by IBI Trust Management, an entity appointed by Taro to serve as its trustee pursuant to Section 102 of the Income Tax Ordinance and approved by the ITA (the “Section 102 Trustee” and such shares, the “Company 102 Shares”)) and (ii) the Section 102 Trustee, the applicable portion of the aggregate consideration payable to holders of Company 102 Shares. As soon as reasonably practicable after the effective time of the merger, the paying agent will mail a letter of transmittal, a request for tax documentation and instructions to each record holder for use in surrendering your ordinary shares and to determine whether any amounts need to be withheld from the consideration payable. When you properly surrender your ordinary shares to the paying agent in exchange for payment together with the requested tax documentation, a properly completed and duly signed letter of transmittal and any other documents that the paying agent may require, or, in the case of ordinary shares held in “street name” through a broker, bank or other nominee, after the paying agent delivers the “agent’s message” with respect to such shares, you will be entitled to receive the merger consideration (less any applicable tax withholding). From and after the effective time of the merger, until certificate(s) representing shares of Taro or book-entry shares have been properly surrendered, each such certificate or book-entry share, as applicable, will be deemed to represent only the right to receive $43.00 in cash, without interest, for each ordinary share.

The paying agent will only pay the merger consideration in a name other than the name in which a surrendered certificate and/or book-entry shares are registered if (i) certificate(s) are properly endorsed and otherwise in proper form for transfer and (ii) such other person who requests such payment (A) pays to the paying agent any taxes incurred because payment is made to such other person or (B) has established to the full satisfaction of the Sun Pharma Entities that such tax has been paid or is not payable. Sun Pharma and Taro have requested a ruling from the ITA regarding the tax withholding required of Sun Pharma, Alkaloida, TDC, SPH, the Surviving Company, the paying agent and the Israeli sub-paying agent. The share certificate and book-entry share exchange procedures must comply with the requirements of such tax ruling.

If a certificate representing Taro shares is lost, stolen or destroyed, Sun Pharma may require, as a condition to the receipt of the merger consideration, that the holder of such certificate sign an affidavit confirming such loss, theft or destruction and post a bond as indemnity against claims made in connection with the lost, stolen or destroyed certificate.

Any funds that have been deposited with the paying agent and have not been disbursed within nine months after the effective time of the merger will be delivered by the paying agent to Alkaloida, TDC or SPH (as shall be instructed by Sun Pharma) upon demand. After that date, holders of certificates who have not complied with the instructions delivered by the paying agent will only be entitled to look to Sun Pharma or Alkaloida, TDC or SPH for payment with respect to the merger consideration payable upon surrender of their certificate(s).

Representations and Warranties

The merger agreement contains certain representations and warranties by Taro relating to, among other things: organization and qualifications of Taro and its subsidiaries; articles of association and memorandum of association; capital structure of Taro; authority of Taro relative to the merger agreement; required shareholder vote; no conflict; information supplied; fairness opinion; and payment of fees to brokers.

50

Certain of the representations of Taro are qualified by materiality or a material adverse effect standard. For purposes of the merger agreement, “material adverse effect” means an effect, change, event or circumstance (each, an “Effect”) that, considered together with all other Effects, has a material adverse effect on: (a) the business, assets, liabilities, condition (financial or otherwise), operations or results of operations of Taro and its subsidiaries taken as a whole; or (b) the ability of Taro to consummate the Transactions or to perform any of its covenants or obligations under the merger agreement; provided, however, that certain matters are not taken into account in determining whether a material adverse effect has occurred: (i) changes in the economy or financial markets (including credit markets) in general, (ii) changes in the economic, business, financial or regulatory environment generally affecting any of the industries in which Taro and its subsidiaries operate, (iii) changes in law or applicable accounting regulations or principles or interpretations thereof, (iv) changes that arise out of the existence or announcement of the merger agreement or out of actions required by the Transactions, (v) acts of war, armed hostilities or terrorism or any escalation or worsening of any acts of war, armed hostilities or terrorism (other than such acts of war, armed hostilities or terrorism, or escalation or worsening thereof, that cause any damage or destruction to, or render physically unusable, any facility or property of Taro or any of its subsidiaries or otherwise disrupt in any material manner the business or operations of Taro or any of its material subsidiaries), (vi) any failure, in and of itself, of Taro to achieve any projections, forecasts, estimates, plans, predictions, performance metrics or operating statistics (provided that the cause or basis for Taro’s failure to meet such projections, forecasts, estimates, plans, predictions, performance metrics or operating statistics shall not be excluded from the determination of whether a material adverse effect has occurred) and (vii) any litigation arising from allegations of a breach of fiduciary duty or other violation of applicable law relating to the Transactions, or the approval thereof; provided, however, that with respect to clauses (i), (ii) and (iii), solely to the extent that the impact of such change or effect is not disproportionately adverse in any material respects to Taro and its subsidiaries taken as a whole compared to other companies in the same industry.

The merger agreement contains representations and warranties by the Sun Pharma Entities relating to, among other things: organization and qualifications of the Sun Pharma Entities; authority of the Sun Pharma Entities to execute, deliver and perform the merger agreement, the merger and the other transactions contemplated by the merger agreement; binding nature of the merger agreement; no required shareholder vote; sufficient financing; disclosure; and share ownership.

The representations and warranties in the merger agreement are not easily summarized and may be subject to important limitations and qualifications agreed to by the parties in connection with negotiating the terms of the merger agreement. In addition, certain representations and warranties may be subject to contractual standards of materiality different from those generally applicable to public disclosures to shareholders, or may have been used for the purpose of allocating risk among the parties rather than establishing matters of fact. You are urged to read carefully the sections of the merger agreement entitled “Representations and Warranties of the Company” and “Representations and Warranties of Sun Pharma, Alkaloida, TDC, SPH and Merger Sub.” The representations and warranties of the parties contained in the merger agreement expire upon the consummation of the merger.

Proxy Statement; Schedule 13E-3; Shareholder Meeting

Taro agreed to prepare this proxy statement and, subject to the reasonable approval of the Special Committee of the content of the proxy statement, to cause this proxy statement to be mailed to Taro’s shareholders as promptly as practicable (provided that, if applicable, such date shall follow the date on which the SEC or its staff advises that is has no further comments on the Schedule 13E-3 (as defined below)). Taro also agreed to cause this proxy statement to comply with legal requirements applicable to it, to provide Sun Pharma with a reasonable opportunity to review and comment on drafts of this proxy statement and promptly cause the proxy statement to be filed with the SEC. The parties agreed to jointly prepare a Schedule 13E-3 (the “Schedule 13E-3”) relating to the Transactions and, subject to the reasonable approval of the Special Committee of the content of the Schedule 13E-3, promptly cause the Schedule 13E-3 to be filed with the SEC. Taro agreed to notify Sun Pharma as soon as practicable of the receipt of any comments from the SEC with respect to the Schedule 13E-3 and any request by the SEC for any amendment to the Schedule 13E-3 or for additional information, and agreed to supply Sun

51

Pharma and with copies of all correspondence between Taro and any of its representatives, on the one hand, and the SEC or members of its staff, on the other hand, with respect to the Schedule 13E-3 or the Transactions. Each of the parties agreed to use its commercially reasonable efforts to resolve all SEC comments with respect to the Schedule 13E-3 as promptly as practicable after receipt thereof.

Taro also agreed to cause an amendment or supplement to be mailed to Taro shareholders and filed with the SEC as soon as reasonably practicable if any event occurs or Taro becomes aware of any information that should be disclosed in an amendment or supplement to this proxy statement. Sun Pharma and Merger Sub agreed that if one of them becomes aware of any information that should be disclosed in an amendment or supplement to this proxy statement or Schedule 13E-3 (if applicable), then Sun Pharma or Merger Sub shall promptly inform the Company of such information. Additionally, Taro has agreed that this proxy statement would include the recommendation of the Board, based on the recommendations of the Audit Committee and the Special Committee, that Taro’s shareholders vote to approve the Transactions, unless such recommendation is modified or withdrawn in accordance with the terms of the merger agreement. Each of the Sun Pharma Entities has agreed to vote or cause to be voted all ordinary shares and Founder Shares beneficially owned by the Sun Pharma Entities and their respective affiliates which they have the power to vote or cause to be voted in favor of the approval of the Transactions and to cause their personal interest in such vote to be duly disclosed to Taro.

Additionally, Taro agreed to call, give notice of and hold an extraordinary general meeting and class meetings of shareholders for the purpose of approving the Transactions. Taro agreed to use its reasonable best efforts to solicit from holders of Taro ordinary shares proxies in favor of the approval of the Transactions.

Merger Sub General Meeting

Each of Alkaloida, TDC and SPH, as the sole shareholders of Merger Sub, has agreed to approve the Transactions immediately following the approval of the Transactions by the shareholders of Taro. Merger Sub has agreed to inform the Companies Registrar of such approval within three days after the approval of the Transactions by Alkaloida, TDC and SPH.

No Solicitation of Alternative Proposals

Taro has agreed that, from the date of the merger agreement and until the earlier of the effective time of the merger and the termination of the merger agreement, it will not, nor will it authorize any of its subsidiaries or representatives to, directly or indirectly:

Taro has also agreed to, and cause its subsidiaries and their respective subsidiaries to, immediately cease and cause to be terminated all existing discussions or negotiations with any person conducted up to the date of the merger agreement with respect to any proposal that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal and request the prompt return or destruction of all confidential information previously furnished.

52

However, if Taro receives an unsolicited bona fide Acquisition Proposal prior to the approval of the merger agreement by Taro’s shareholders and Taro did not breach its non-solicitation obligations, then Taro may (i) contact the person or any of its representatives who has made such Acquisition Proposal to clarify the terms of such Acquisition Proposal so that Taro’s Board or the Special Committee may inform itself about such Acquisition Proposal, (ii) afford access to or furnish information concerning itself and its business, properties or assets or provide access to a data room (virtual or actual) to such person or any of its representatives pursuant to a confidentiality agreement (which Taro and its representatives shall be permitted to negotiate) on standard terms and (iii) negotiate and participate in discussions and negotiations with such person or any of its representatives concerning such Acquisition Proposal, in the case of clauses (ii) and (iii), only if Taro’s Board or the Special Committee determines in good faith, after consultation with its outside legal counsel(s) and financial advisor(s), that such Acquisition Proposal constitutes or is reasonably likely to constitute or result in a Superior Proposal.

Taro has agreed that it will promptly (and in any case within thirty-six (36) hours) (A) provide Sun Pharma notice (1) of its receipt (or receipt by any of its representatives) of any Acquisition Proposal and (2) of any inquiries, proposals or offers by third parties received by, any requests by third parties for nonpublic information from, or any discussions or negotiations initiated or continued (or sought to be initiated or continued) by third parties with, the Taro or any of its representatives concerning an Acquisition Proposal, and disclose the material terms of such offer, proposal or request and (B) make available to Sun Pharma, all material nonpublic information, including copies of all material written materials, made available by Taro to such party but not previously made available to Sun Pharma. Taro has further agreed to keep Sun Pharma promptly and reasonably informed of the status of discussions relating to any such Acquisition Proposal or any material modifications thereto.

An “Acquisition Proposal” is defined under the merger agreement as any proposal, offer or indication of interest from any person, relating to any direct or indirect acquisition or purchase, in one (1) transaction or a series of transactions, of assets or businesses that constitute fifteen percent (15%) or more of the consolidated net revenues, net income, or assets (based on the fair market value thereof) of the Company and its subsidiaries, taken as a whole (an “Asset Sale Transaction”), or fifteen percent (15%) or more of any class of voting or equity securities of the Company, any tender offer or exchange offer or issuance of voting or equity securities that if consummated would result in any person beneficially owning fifteen percent (15%) or more of any class of voting or equity securities of the Company, or any merger, consolidation, business combination, recapitalization, liquidation, dissolution, joint venture, binding share exchange or similar transaction involving the Company or wholly owned subsidiary pursuant to which any person or the stockholders of any person would own fifteen percent (15%) or more of any class of voting or equity securities of the Company or of the Surviving Company or of any resulting parent company of the Company under such transaction, other than the Transactions.

A “Superior Proposal” is defined under the merger agreement as a bona fide written Acquisition Proposal, which would result in a transaction (i) that, if consummated, is more favorable to the Company’s shareholders from a financial point of view than the Transactions (taking into account at the time of determination all relevant circumstances Taro’s Board or the Special Committee deems proper, including the various legal, financial and regulatory aspects of such proposal, all the terms and conditions of such proposal (including any termination or break-up fees, expense reimbursement provisions and any conditions, potential time delays or other risks to consummation), and any changes to the terms of the merger agreement irrevocably offered by Sun Pharma in writing in response to such Acquisition Proposal), and (ii) that is reasonably capable of being completed on the terms proposed, taking into account the identity of the person making the Acquisition Proposal, any shareholder approval or other approval requirements and all other financial, regulatory, legal and other aspects of such proposal, and the Parent Restrictive Undertaking (to the extent Sun Pharma confirms its intent not to sell ordinary shares or vote in favor of the Acquisition Proposal upon notice by the Company of the Acquisition Proposal). For purposes of this definition, the reference to “fifteen percent (15%) or more of” in the definition of “Acquisition Proposal” as it relates to an Asset Sale Transaction is deemed to be a reference to “the majority of”.

53

Changes in Board Recommendation and Special Committee Recommendation

Prior to the Taro shareholder approval of the Transactions, neither the Board nor the Special Committee may withdraw or modify in a manner adverse to the Sun Pharma Entities, its recommendation that the Taro shareholders approve the Transactions unless in response to (i) the receipt by Taro of an unsolicited bona fide Acquisition Proposal, which was not received as a result of a breach of Taro’s non-solicit obligations, which Taro’s Board or the Special Committee determines in good faith, after consultation with its financial advisors and outside legal counsel, constitutes a Superior Proposal or (ii) material facts, events, changes or developments in circumstances arising after the date the merger agreement that were not known or reasonably foreseeable to the Board, its officers or the Special Committee as of or prior to the date of the merger agreement and do not relate to an Acquisition Proposal or the receipt of any permit or approval from a governmental body with respect to Taro’s products currently under development (an “Intervening Event”, it being understood that in no event will changes to the Taro’s share price be construed to be an Intervening Event (provided that the facts, events, changes or developments in circumstances giving rise to or contributing to any such change may constitute an Intervening Event)), Taro’s Board, upon recommendation of the Special Committee, or the Special Committee, respectively, determines, after taking into account the advice of its outside legal counsel(s) and financial advisor(s), that the failure to withdraw or so modify the recommendation of the Board or the recommendation of the Special Committee, respectively, as a result of the Superior Proposal or Intervening Event, would be inconsistent with the fiduciary obligations of the Board or the Special Committee, respectively, under applicable law (in either case, a “Change in Recommendation”); provided, however, that unless made later than the fifth business day preceding the meetings, no Change in Recommendation may be made until after at least five business days following the receipt by Sun Pharma of notice from Taro advising that the Board or Special Committee, as applicable, intends to take such action and the basis therefor, including reasonably detailed information regarding the circumstances and details surrounding such action. Taro agreed to notify Sun Pharma promptly of: (A) any withdrawal of or modification to the recommendation of the Board or of the Special Committee; and (B) the circumstances and details surrounding such withdrawal or modification. In the event that prior to Taro shareholder approval, either the Board or the Special Committee duly makes a Change in Recommendation in accordance with the merger agreement, Taro (acting at the direction of the Special Committee) or Sun Pharma shall have the right to terminate the merger agreement.

The merger agreement further provides that irrespective of whether there is any Superior Proposal, or any Change in Recommendation, Taro’s Board and the Special Committee shall communicate to the holders of ordinary shares and the founders’ shares in the proxy statement that they have been advised by Sun Pharma that Sun Pharma will not consider selling its ordinary shares or founders’ shares (the “Parent Restrictive Undertaking”). In the event of a Change in Recommendation, Taro’s Board and Special Committee is required to reiterate the Parent Restrictive Undertaking as part of the public disclosure about such Change in Recommendation, to the extent requested at the time by Sun Pharma.

Regulatory Matters

The parties have agreed to use commercially reasonable efforts to deliver and file, as promptly as practicable after January 17, 2024, each notice, report or other document required to be delivered by such party to or filed by such party with any Israeli governmental body with respect to the merger.

Taro applied for a Withholding Ruling from the ITA (i) exempting the Sun Pharma Entities and their affiliates, the paying agent, the Israeli paying agent and the Surviving Company from any obligation to withhold Israeli tax at source from any consideration payable or otherwise deliverable as part of the merger consideration, or clarifying that no such obligation exists; and/or (ii) clearly instructing the Sun Pharma Entities and their affiliates, the paying agent, the Israeli paying agent or the Surviving Company how such withholding at source is to be executed, and in particular, with respect to the classes or categories of holders or former holders of Taro shares from which tax is to be withheld (if any), the rate or rates of withholding to be applied.

54

Each party agreed to give the other parties prompt notice of the commencement of any legal proceeding by or before any Israeli governmental body with respect to the merger, keep the other parties informed as to the status of any such legal proceeding, and promptly inform the other parties of any communication with the Companies Registrar or any other Israeli governmental body regarding the Transactions.

Each party to the merger agreement agreed to use commercially reasonable efforts to file, as promptly as reasonably practicable after January 17, 2024, all notices, reports and other documents required to be filed with any governmental body with respect to the Transactions and to submit promptly any additional information requested by any such governmental body.

Under the Companies Law, Taro and Merger Sub may not complete the merger without first making the following filings and notifications to the Israeli Companies Registrar: (i) filing a “merger proposal” in accordance with Section 317(a) of the Companies Law; (ii) providing notices to creditors of the proposed Merger (specifically, a copy of the merger proposal must be sent to the secured creditors of each merging company within three days after its filing with the Israeli Companies Registrar, known substantial creditors must be informed individually by registered mail of the filing of the merger proposal with the Israeli Companies Registrar within four business days thereof, where it can be reviewed, and non-secured creditors must be informed of the merger proposal by publication in two daily Hebrew newspapers circulated in Israel on the day that the merger proposal is submitted to the Israeli Companies Registrar and, where necessary, elsewhere and by making the merger proposal available for review); (iii) because Taro employs more than 50 employees, Taro must provide to the workers’ union a copy of the publication placed in the newspapers or post a copy of the publication placed in the newspapers in a prominent location in the workplace within three business days after the filing of the merger proposal with the Israeli Companies Registrar; (iv) after notification to creditors, each of the merging companies must file a notice with the Israeli Companies Registrar confirming the notice was sent to their respective creditors; and (v) after the shareholders vote, each of the merging companies must file a notice with the Israeli Companies Registrar regarding the decision of its shareholders.

Assuming that the shareholders of each of the merging companies approve the Transactions (and that all the other conditions set forth in the merger agreement have been satisfied or waived, if permissible under applicable law), and so long as at least 30 days have passed from the date of the meetings and at least 50 days have passed from the date of the filing of the merger proposal with the Israeli Companies Registrar by both merging companies, the merging companies shall notify the Israeli Companies Registrar that the conditions for the merger have been satisfied or waived and request for the Israeli Companies Registrar to issue a certificate evidencing the consummation of the merger, and upon issuance of such certificate by the Israeli Companies Registrar, the merger will become effective and the Israeli Companies Registrar will be required to register the merger in the Surviving Company’s register and to issue the Surviving Company a certificate of merger.

Notice of Certain Events; Communications with Government Bodies

Taro has agreed to give prompt written notice to Sun Pharma, and Sun Pharma has agreed to give prompt written notice to Taro, of (i) any material communication received from (a) any governmental body or (b) from any person alleging that such person’s consent is or may be required in connection with the Transactions; (ii) any material claims, actions, suits, proceedings or investigations commenced or, to such party’s knowledge, threatened that relate to the Transactions; and (iii) any fact known to such party that would cause or constitute, or would reasonably be expected to cause or constitute, a breach in any material respect of any such party’s representations, warranties, covenants or agreements contained in the merger agreement or would reasonably be expected to prevent, materially delay or impede, the consummation of the merger or any other transaction contemplated by the merger agreement.

Each party to the merger agreement agreed to permit the other parties to review in advance any substantive communication proposed to be made by such party to any governmental body and provide the other parties with copies of all correspondence, filings or other communications between them and any governmental body. The

55

parties to the merger agreement will coordinate and cooperate fully with each other in exchanging such information and providing such assistance as the other party may reasonably request in connection with the foregoing.

Stock Exchange Delisting

Sun Pharma and Taro agreed to cooperate and use commercially reasonable efforts to cause the delisting of Taro’s ordinary shares from the New York Stock Exchange and the deregistration of such ordinary shares as promptly as practicable following the closing of the merger.

Additional Agreements

Sun Pharma, Alkaloida, TDC, SPH and Taro agreed to use commercially reasonable efforts to take or cause to be taken, all actions necessary to consummate the Transactions.

Prior to the effective time of the merger, none of the Sun Pharma Entities or Taro may take or cause to be taken any action to cause any change in the composition of the Special Committee. Additionally, prior to the effective time of the merger, in addition to any approvals of the Board or the Taro shareholders as required by applicable law, the approval of the Special Committee is required (i) for Taro to terminate or amend the merger agreement, (ii) for Taro to exercise or waive any of its benefits, rights or remedies under the merger agreement or (iii) for Taro to take any action that would prevent or materially delay the consummation of the merger.  The Special Committee has the sole authority to direct Taro to terminate the merger agreement.

Disclosure

Sun Pharma and Taro agreed to consult with each other before issuing any press release or otherwise making any public statement with respect to the Transactions.

Director and Officer Indemnification and Insurance

Following the merger, the Surviving Company is to use commercially reasonable efforts to maintain the directors’ and officers’ liability insurance policy currently in effect (or substitute such policy with a comparable policy), which provides coverage with respect to the acts and omissions of Taro officers and directors occurring prior to the effective time of the merger, for a period of seven years following the merger; provided that Taro, as the Surviving Company, shall not be required to expend annually more than 250% of its annual current premiums for such coverage. All rights to indemnification by Taro or its subsidiaries in favor of their current or former directors and officers as of or prior to January 17, 2024 for their acts and omissions as directors and/or officers occurring prior to the effective time of the merger pursuant to any indemnification agreements in effect prior to the closing will survive for a period of seven years following the merger. In addition, Sun Pharma agreed, unless otherwise required by law, to cause the Articles of Association and comparable organizational documents of the Surviving Company and each of its subsidiaries to contain provisions no less favorable with respect to exculpation and limitation of liabilities of directors and officers, insurance and indemnification than were set forth on January 17, 2024 in the Company’s Articles of Association and comparable organizational documents of the relevant subsidiaries, which provisions shall not be amended, repealed or otherwise modified in a manner that would adversely affect the rights thereunder of the applicable officers and directors with respect to exculpation and limitation of liabilities or insurance and indemnification.

Resignation of Directors.

Prior to the closing date of the merger, Taro shall cause each director to execute a resignation and release letter in a form acceptable to Sun Pharma, effective as of the effective time of the merger.

56

Treatment of Company Employees

From the effective time of the merger until the first anniversary of such effective time (or, if earlier, the termination date of the relevant employee), Sun Pharma has agreed to use commercially reasonable efforts to provide, or cause the Surviving Company and its subsidiaries to use commercially reasonable efforts to provide, to each employee of Taro at the effective time of the merger (a “Continuing Employee”) employee benefits, including, without limitation, annual base compensation, target short-term incentive and long-term incentive opportunities and severance benefits (but excluding change in control, retention, and other similar bonuses or payments, defined benefit pension benefits and retiree medical benefits) that are substantially comparable in the aggregate to either (i) their current benefits or (ii) the benefits of similarly situated employees of Sun Pharma or its applicable subsidiaries in the same or comparable geographical locations.

With respect to all plans maintained by Sun Pharma, the Surviving Company or their respective subsidiaries (including any vacation, paid time-off and severance plans), for purposes of eligibility and vesting, each Continuing Employee’s service with will be treated as service with Sun Pharma, the Surviving Company or any of their respective subsidiaries to the same extent it was credited under an analogous employee benefit plan prior to the merger; provided, however, that such service need not be recognized to the extent that such recognition would result in any duplication of benefits for the same period of service.

Sun Pharma will use commercially reasonable efforts to cause to be waived any pre-existing condition limitations, exclusions, actively-at-work requirements and waiting periods under any welfare benefit plan maintained by Sun Pharma, the Surviving Company or any of their respective subsidiaries in which Continuing Employees (and their eligible dependents) will be eligible to participate from and after the merger, except to the extent that such pre-existing condition limitations, exclusions, actively-at-work requirements and waiting periods would not have been satisfied or waived under the analogous employee benefit plan of Taro immediately prior to the merger.

The foregoing provisions relating to the treatment of employees are intended for the sole benefit of the parties to the merger agreement, and (i) shall not be construed as requiring or shall require Sun, Taro or any of their affiliates to continue the employment or service of any specific person, to limit the ability of Sun, Taro or any of their respective affiliates from terminating the employment or service of any employee or other service provider (including any Continuing Employee); (ii) shall not alter or limit the ability of Sun, Taro or any of their respective affiliates from amending, modifying or terminating any benefit plan, program, policy, agreement or arrangement of Sun, Taro or any of their respective affiliates; (iii) shall not establish or constitute an amendment, termination or modification of, or an undertaking to establish, amend, terminate or modify, any benefit plan, program, policy, agreement or arrangement of Sun, Taro or any of their respective affiliates; or (iv) shall not be construed to create or waive any right to any compensation or benefits on the part of any Continuing Employee or other future, present or former employee or other service provider of Sun, Taro or any of their respective affiliates, and shall not be deemed to confer upon any other person any rights or remedies under the merger agreement or make any employee or other service provider of the parties to the merger agreement or any other person a third party beneficiary of the merger agreement.

Conditions to Completion of the Transaction

The obligations of the Sun Pharma Entities to effect the Transactions are subject to the satisfaction (or waiver to the extent permitted under applicable law) of the following conditions:

57

The obligation of Taro to effect the Transactions are subject to the satisfaction (or waiver to the extent permitted under applicable law) of the following conditions:

58

Termination of the Merger Agreement

The merger agreement may be terminated at any time prior to the effective time of the merger (notwithstanding any approval by Taro’s shareholders):