Torrent Expects JB Pharma Deal To Reach Completion Over 15-18 Months

Torrent Pharmaceuticals expects the Rs 19,500-crore deal to acquire majority stake in Mumbai-based J B Chemicals and Pharmaceuticals to complete over the next 15-18 months. As per the deal, which is the second largest in the domestic pharmaceutical space behind Sun Pharma's 2015 acquisition of Ranbaxy, Torrent will acquire 46.39% stake from promoters Tau Investment Holdings Pte Ltd. (a unit of global investment firm) for about Rs 11,917 crore.

It would additionally buy another 2.80% from certain employees of JB Chemicals at the same acquisition price of Rs 1,600 per share (totaling Rs 719 crore).

Post this, it would make an open offer for buying 26% from open market, as per listing norms, at a price of Rs 1,639.18 per share (totaling Rs 6,842.8 crore).

"Overall timeline for completion of the transaction: 15-18 months," Torrent Pharmaceuticals said in an investor presentation on the BSE.

The company would mainly need approvals for the deal from the Competition Commission of India, stock exchanges and Securities and Exchange Board of India.

Post share purchase, JB Pharma will merge into Torrent. Every shareholder holding 100 shares in JB Pharma shall receive 51 shares of Torrent.

Strategically, the deal gives Torrent access to JB Pharma's leading brands in the chronic segment and opens up untapped therapeutic areas like ophthalmology.

Besides creating operational synergies, the deal is expected to strengthen Torrent's market share in the Indian pharmaceutical market and diversify its platform into contract development and manufacturing.

The acquisition will strengthen Torrent's market share in the IPM as well as give entry into the CDMO segment with long-term potential. It would also have consolidation in key international markets and give greater ability to scale up.

Torrent-JB Pharma deal is the second largest so far in the Indian pharma space.

In April 2014, Sun Pharma had announced it would acquire troubled rival Ranbaxy in an all-stock transaction worth $4 billion that includes $800 million debt.

The merger was 'consummated' following receipt of requisite approvals a year later in March 2015.

In another big deal, Mankind Pharma last year completed the transaction to acquire Bharat Serums and Vaccines Ltd., for a consideration of Rs 13,768 crore.

In July last year, Mankind had announced that it will acquire a 100 per cent stake in BSV.