Israeli drugmaker Taro Pharmaceutical Industries Ltd. has agreed to a sweetened buyout offer from Sun Pharmaceutical Industries Ltd., paving the way for it to be taken private in a deal that values Taro at about $1.76 billion.

Mumbai, India-based Sun will pay about $580.6 million for about one-third of the company it doesn't already own, based on its 44.5 million shares outstanding. The offer is worth $39.50 per share, well above the offer Taro brushed aside last month.

Last month, Taro rejected Sun's offer of $24.50 per share that it made in October. That offer was a 26 percent premium to Taro shares at the time. But the stock has since accelerated, closing Friday at $40.97. The stock lost $1.50, or 3.7 percent, to hit $39.47 in morning trading Monday.

The companies have discussed an acquisition on and off since mid-2007.