Torrent Pharma seeks CCI nod to acquire majority stake in JB Chemicals in ₹19,500-crore deal

Torrent Pharmaceuticals has sought approval from India’s fair trade regulator to acquire a majority stake in JB Chemicals & Pharmaceuticals in a Rs 19,500-crore ($2.34 billion) deal, according to a filing with the Competition Commission of India (CCI).

The Ahmedabad-based company announced the proposed acquisition in June.

It plans to buy 46.39% from JB Chemicals’ promoter Tau Investment Holdings Pte Ltd, an affiliate of KKR, for about ₹11,917 crore, and an additional 2.80% from certain employees for ₹719 crore at ₹1,600 per share.

It will also launch an open offer for a further 26% stake at ₹1,639.18 per share, totaling ₹6,842.8 crore.

Torrent Pharma will then merge JB Chemicals into itself, making it India’s second most valued pharma company after Sun Pharmaceutical Industries, which acquired Ranbaxy Laboratories in a $4 billion deal in 2015.

“The proposed combination relates to acquisition of shareholding by Torrent Pharmaceuticals Ltd in JB Chemicals & Pharmaceuticals Ltd and the subsequent amalgamation of the target with the acquirer,” the notice said.

In June, Torrent Pharmaceuticals secured a credit line for ₹20,000 crore from global banks toward its acquisition of a controlling stake in JB Chemicals & Pharmaceuticals Ltd.

JB Chemicals manufactures and markets a diverse range of formulations and active pharmaceutical ingredients (APIs), with a presence in gastroenterology, dermatology, and diabetes. It also offers contract development and manufacturing (CDMO) services.

KKR had acquired a 65% stake in JB Chemicals in 2020 and recently sold a 5.8% stake for ₹1,460 crore in March.

Torrent Pharma, the flagship company of the Torrent Group with annual revenues exceeding ₹11,500 crore, manufactures and sells pharmaceutical formulations across multiple therapeutic segments. The deal marks the second biggest acquisition in India’s pharma sector, following Sun Pharma’s Ranbaxy takeover.

Last year, Mankind Pharma completed its acquisition of Bharat Serums and Vaccines for ₹13,768 crore.