Torrent Pharmaceuticals Ltd has announced a significant acquisition that will make it India’s second most valuable pharmaceutical company. Torrent Pharmaceuticals has formalized an agreement to acquire a 46.39% controlling interest in JB Chemicals & Pharmaceuticals Ltd (JB Pharma) from global investor KKR, assigning the company a valuation of ₹25,689 crore.
Deal Structure: Three-Phase Acquisition Plan
Torrent will execute the acquisition in a phased manner, combining share purchases and a merger plan:
1. Primary Share Purchase
Torrent is set to purchase 7.44 crore equity shares—equivalent to a 46.39% stake in JB Pharma—at ₹1,600 per share, amounting to a total deal value of approximately ₹11,917 crore. This forms the core of the acquisition from KKR.
2. Mandatory Open Offer
As required by SEBI regulations, Torrent will initiate an open offer to acquire up to 26% of JB Pharma’s equity, priced at ₹1,639.18 per share, potentially adding ₹6,842.8 crore to the transaction.
3. Final Merger
Post-acquisition, JB Pharma will be merged into Torrent Pharmaceuticals, with shareholders receiving 51 Torrent shares for every 100 JB Pharma shares they hold.
Additional Stake Acquisition from Employees
Torrent has also agreed to purchase an additional 2.41% stake in JB Pharma from employees who exercised their stock options. This transaction, priced at ₹1,600 per share, represents 38.75 lakh shares and is valued at ₹620 crore.
Torrent may further buy up to 0.39% more (approximately 6.24 lakh shares) from other employees, bringing the total potential stake to 49.19% before the open offer.
🧠 Strategic Rationale Behind the Acquisition
This acquisition is not just about expansion—it aligns with Torrent’s long-term growth strategy. Here’s why this deal matters:
- 🔹 Strengthening India Presence: JB Pharma brings a robust domestic portfolio, especially in chronic therapies.
- 🔹 Entry into New Segments: Torrent gains exposure to ophthalmology and other untapped therapeutic areas.
- 🔹 Operational Integration: Streamlined collaboration across research, production, and marketing functions to boost overall efficiency.
- 🔹 CDMO Diversification: A strategic move into Contract Development and Manufacturing (CDMO) with long-term potential.
- 🔹 International Expansion: Strengthens Torrent’s presence in strategic global markets such as Russia and South Africa.
📋 Deal Structure and Required Approvals
The transaction structure includes:
- A 46.39% share acquisition via a Share Purchase Agreement (SPA)
- Additional acquisition of up to 2.80% stake from employees
- A 26% open offer under SEBI’s Substantial Acquisition of Shares and Takeovers (SAST) Regulations
- Final merger via Scheme of Arrangement
The transaction is subject to clearances from the following regulatory authorities:
- Securities and Exchange Board of India (SEBI)
- Stock Exchanges (BSE, NSE)
- Competition Commission of India (CCI)
- National Company Law Tribunal (NCLT)
- Other applicable statutory approvals
🤝 Advisors to the Transaction
This high-profile deal involved multiple leading advisors:
For Torrent Pharmaceuticals:
- Moelis & Company and NovaOne – Financial Advisors
- Khaitan & Co. – Legal Counsel
- EY Merchant Banking Services LLP – Registered Valuer
For JB Pharma:
- BDO Valuation Advisory LLP – Valuation Consultant
- Goldman Sachs (India) Securities Pvt. Ltd. – Financial Advisor
- AZB & Partners – Legal Counsel to JB Pharma Board
For KKR:
- Kotak Investment Banking and Rothschild & Co – Financial Advisors
- Shardul Amarchand Mangaldas & Co – Legal Counsel
In addition, Axis Capital Limited and ICICI Securities Limited offered independent fairness assessments for the proposed share swap ratio.
🏢 About Torrent Pharmaceuticals
Torrent Pharmaceuticals Ltd, based in Ahmedabad, is a prominent name in the Indian pharmaceutical industry. The company is highly focused on chronic and sub-chronic therapies, with a stronghold in cardiovascular, central nervous system (CNS), and gastrointestinal segments. Known for its innovation-driven R&D and global reach, Torrent has established a presence across the U.S., Brazil, Germany, and other international markets.
🧬 About JB Chemicals & Pharmaceuticals Ltd (JB Pharma)
JB Pharma is one of the fastest-growing pharma companies in India, particularly known for its leadership in hypertension treatments. It boasts six top-selling brands within India’s top 300 products in the Indian Pharmaceutical Market (IPM).
Key facts:
- Listed on BSE (506943) and NSE (JBCHEPHARM)
- Operates across India, Russia, and South Africa
- Exports to over 40 countries, including the U.S.
- Strong presence in medicated lozenges and CDMO services
- Owns eight advanced manufacturing plants in India, all with global regulatory approvals
🌍 About KKR
KKR (Kohlberg Kravis Roberts & Co.) is a renowned global investment firm known for managing alternative assets and offering capital market and insurance solutions. KKR backs companies with a disciplined, long-term investment strategy and supports businesses through operational improvements and capital resources.
- Specializes in private equity, credit, real assets, and insurance
- Operates under Global Atlantic Financial Group for insurance services
- Listed on the NYSE (Ticker: KKR)
- Website: www.kkr.com
🧾 Conclusion: A Strategic Leap in Indian Pharma
Torrent Pharma’s majority stake purchase in JB Pharma represents a landmark transaction, ranking among the most significant mergers in India’s pharmaceutical sector. It strengthens Torrent’s domestic leadership, expands its therapeutic reach, and adds a valuable international presence—especially in chronic therapies and CDMO capabilities.
As regulatory approvals proceed, the combined entity is expected to offer enhanced shareholder value, market strength, and global competitiveness.