Torrent expects jb chemicals acquisition deal to close in 15–18 months

Torrent expects jb chemicals acquisition deal to close in 15–18 months

Torrent Pharmaceuticals expects to complete its proposed acquisition of a majority stake in Mumbai-based J B Chemicals and Pharmaceuticals within the next 15 to 18 months. The transaction, once concluded, will become the second-largest deal in the Indian pharmaceutical sector, following Sun Pharma's 2015 acquisition of Ranbaxy.

Torrent will acquire a 46.39 per cent stake in JB Chemicals from promoters Tau Investment Holdings Pte Ltd, a unit of a global investment firm, for approximately ₹11,917 crore. In addition, Torrent will buy another 2.80 per cent from certain employees of JB Chemicals at the same acquisition price of ₹1,600 per share, amounting to ₹719 crore.

Following these transactions, Torrent will launch an open offer to acquire 26 per cent of shares from the open market in accordance with listing norms. The open offer is priced at ₹1,639.18 per share and will amount to a total consideration of ₹6,842.8 crore.

‘Overall timeline for completion of the transaction: 15–18 months,’ Torrent Pharmaceuticals said in an investor presentation to the BSE.

The company said that it would require approvals for the deal from the Competition Commission of India (CCI), stock exchanges, and the Securities and Exchange Board of India (SEBI).

Once the share purchase is completed, JB Pharma will merge with Torrent. According to the share swap ratio, every JB Pharma shareholder holding 100 shares will receive 51 shares of Torrent.

Torrent said that the acquisition would provide it access to JB Pharma’s established brands in the chronic segment and open up new therapeutic areas such as ophthalmology. The deal is also expected to generate operational synergies, improve Torrent’s market share in the Indian pharmaceutical market, and allow diversification into contract development and manufacturing operations.

Torrent expects the transaction to strengthen its position in the Indian pharmaceutical market (IPM) and provide an entry into the contract development and manufacturing organisation (CDMO) segment, which it sees as having long-term potential. The company also expects the deal to result in consolidation in key international markets and offer greater scalability.

The Torrent–JB Pharma deal is the second-largest to date in the Indian pharma space. In April 2014, Sun Pharma announced a $4 billion all-stock transaction to acquire rival Ranbaxy, which included $800 million in debt. That deal was finalised in March 2015 following the required regulatory approvals.

In another significant deal last year, Mankind Pharma acquired Bharat Serums and Vaccines Ltd (BSV) for ₹13,768 crore. In July 2023, Mankind had announced it would acquire 100 per cent stake in BSV.