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Torrent Pharma has informed the stock exchanges that it will acquire a controlling stake in JB Chemicals
Torrent Pharma to acquire controlling stake in JB Pharma
Torrent Pharma Shares: Torrent Pharmaceuticals Ltd shares will be in focus after the company said that it has entered into definitive agreements with global investment firm KKR to acquire a majority stake in JB Chemicals & Pharmaceuticals (JB Pharma), in a transaction that values JB Pharma at Rs 25,689 crore on a fully diluted basis. Following the acquisition, JB Pharma will merge with Torrent, making the combined entity India’s second most valued pharmaceutical company, after Sun Pharma.
Torrent will first acquire a 46.39% stake in JB Pharma from Tau Investment Holdings Pte Ltd (a KKR entity) for Rs 11,917 crore, at Rs 1,600 per share. It will also acquire an additional 2.80% from JB Pharma employees at the same price, for Rs 719 crore.
Subsequently, Torrent will launch a mandatory open offer to acquire a further 26% stake from public shareholders at Rs 1,639.18 per share, totalling Rs 6,842.8 crore. This offer price is at a discount to JB Pharma’s closing share price of Rs 1,799.35 on Friday.
The deal, the second-largest in the Indian pharmaceutical sector after Sun Pharma acquired Ranbaxy in 2015, gives Torrent access to JB Pharma’s chronic care portfolio and opens up new therapeutic segments, including ophthalmology. The merger will also enhance Torrent’s position in India’s pharma market and expand its presence into contract development and manufacturing (CDMO), a segment with long-term growth potential.
“JB Pharma’s India business, combined with our domestic strength and global footprint, provides a strong platform to scale revenue and profitability,” said Samir Mehta, Executive Chairman, Torrent Pharmaceuticals. “The CDMO platform also offers a promising long-term growth avenue.”
Gaurav Trehan, Co-Head of Asia Pacific and CEO of KKR India, added, “JB Pharma’s transformation under KKR showcases our ability to scale high-quality businesses. We are proud to have supported its growth journey.”
As part of the merger terms, JB Pharma shareholders will receive 51 shares of Torrent for every 100 shares held. The transaction is subject to regulatory approvals from SEBI, the CCI, NCLT, and others.
This strategic consolidation is expected to boost Torrent’s competitiveness in India, strengthen its international operations, and create significant operational synergies in the years ahead.
Nomura has maintained a ‘Neutral’ rating on Torrent Pharmaceuticals, with a target price of Rs 3,580, suggesting a 7% upside from the stock’s last closing price. The brokerage noted that Torrent’s strong track record with past acquisitions and its robust M&A strategy offer investors a degree of reassurance. While the deal is expected to deliver short-term cost efficiencies and long-term revenue benefits, Nomura pointed out that the size of this transaction is significantly larger than Torrent’s earlier acquisitions.
Meanwhile, HSBC reiterated its ‘Buy’ rating, stating that the acquisition will bolster Torrent’s presence in chronic therapies in the Indian market and enhance its global capabilities in the contract development and manufacturing (CDMO) segment. Though HSBC acknowledged that the transaction may temporarily weigh on earnings due to higher interest costs and amortisation, it views the deal as a key growth driver, pending regulatory approvals.
As of 9:20 AM, Torrent Pharma shares were up 1%, while JB Chemicals stock declined more than 6%.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
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