Mumbai: Ahmedabad-based Torrent Pharma has entered into a definitive agreement with global investment firm KKR to acquire its 46.39% controlling stake in JB Chemicals & Pharmaceuticals, one of India’s oldest pharma companies, the company announced on Sunday, June 29. The value of this deal is about Rs.11,917 crore. Torrent will also make an open offer to JB’s public shareholders to acquire another 26% of the company at Rs.1,639.18 per share. The company aims to merge JB Chemicals operations with itself.
Torrent and KKR were in discussions for almost 10 months, even as rumors of the deal had emerged in the media in April. Torrent Pharma has a 3.8% market share in India’s 42.75 lakh crore pharma market. This is a major consolidation move in India’s pharma sector, which is dominated by generic brands. Reports have suggested that Torrent pharma has been negotiating with HSBC, Standard Chartered Bank and Barclays to raise about $1.6 billion for the deal.
JB Chemicals has seen a massive turnaround in its finances lately under KKR’s leadership, which bought a controlling stake in the company from the promoters for Rs.3,100 crore. The American private equity giant is expected to make a 5 time gain on its investment in rupee terms.
“Over the past five years, JB Pharma has emerged as one of India’s fastest growing pharmaceutical players, owing to KKR’s strategic guidance, stewardship of our independent directors and a focused strategic and executional excellence by the management team. We have built a strong foundation to deliver market-leading growth, as well as consistent improvement in profitability in the medium and long term. As we now enter a new chapter alongside Torrent Pharmaceuticals, we are confident that the combined strengths of our organizations will unlock greater opportunities to enhance healthcare access across our markets” Nikhil Chopra, Chief Executive Officer and Whole Time Director of JB Pharma, said.
Torrent Pharma has been aggressively looking to expand its operations through acquisitions, and this is poised to become its largest so far. In an interview with ET, Torrent Pharma MD designate Aman Mehta said
”From here onwards, acquisitions will continue to remain a priority. And the top three in the Indian market is something that we have our eyes on. Organically it may be difficult to achieve in the near term. But certainly through inorganic growth it seems quite possible, and may be in the next couple of years, if something materializes, that certainly is going to be part of our ambition.”
Last year, the company aimed to take over Biogaran, France’s largest generic company before the French government blocked the deal. In 2023, the company aimed to buyout Cipla for $7 billion, but the deal fell through due to differences with the promoter family.
The company has made five major acquisitions so far, the latest one being skincare manufacturer Curatio Healthcare for Rs.2,000 crore.
