Torrent Pharmaceuticals buys JB Chemicals to reinforce its presence in the pharmaceutical business and diversify its CDMO in not only India but also the overseas markets.

Torrent Pharmaceuticals has declared that the company has purchased a controlling share of 46.39 percent in JB Chemicals and Pharmaceuticals from international investment company KKR. This is one of the consolidation deals in the Indian drug industry worth 25,689 crore.

During the initial phase, KKR will sell its stake to Torrent by indulging in a share purchase agreement of 11,917 crores at a share price of 1,600 per share. A follow-up buyout will enable Torrent to take up to 26 percent of the shares publicly held at 1,639.18 to 1 rupee per share. Torrent is also planning to buy 2.80 percent of the stock in JB Pharma by employees.

Phase two is the merger of JB Pharma into Torrent Pharmaceuticals, under which they are giving 51 shares of Torrent for every 100 shares of JB Pharma. The two will merge to boost Torrent's Indian pharmaceutical business positions and build its CDMO presence worldwide.

Samir Mehta, the Executive Chairman of Torrent stated that the merger fits in with their long-term plans to expand their operations and create a diversified pharmaceutical platform. According to JB Pharma CEO, Nikhil Chopra, he was sure that the merger would improve access to healthcare in the markets.

Once regulatory approvals are received, the acquisition will help to increase Torrent's market share and operational synergy and also expand into new areas of therapy such as ophthalmology.