Torrent Pharmaceuticals receives CCI approval of the merger with JB Chemicals at a price of 2.34 billion dollars under the competition safeguards.

The pharmaceuticals industry in India is experiencing one of the largest consolidation deals of the year. The Competition Commission of India (CCI) has given a unanimous approval to the acquisition of J.B. Chemicals and Pharmaceuticals by Torrent Pharmaceuticals, which is a leading Indian drugmaker, at a cost of $2.34 billion (₹19,500 crore). The consent is conditional to ensure that there is healthy competition in key drug segments.

Torrent will purchase 46.39 percent of Tau Investment Holdings, an affiliate of KKR, at a cost of about 1.43 billion and do further share buybacks and a public offering. Upon the merger, J.B. Chemicals will be integrated with Torrent to create one of the biggest integrated pharmaceutical organizations in India.

The CCI first raised questions over possible monopolization in two drug categories, namely nifedipine, a treatment for hypertension, and lactobacillus, which is a probiotic. As a show of this, the two companies willingly signed a three-year price freeze in a bid to protect consumer interests.

The merger highlights the increasing importance of India in the global supply chain of pharmaceuticals to the global investors, the majority of whom are here in the U.S. The acquisition is the second largest acquisition in Indian pharma history after the Ranbaxy acquisition by Sun Pharma in 2015.

This merger reflects the growth potential of India, as well as the regulatory scrutiny at work in the rapidly evolving pharmaceuticals industry as U.S.-based investors continue to explore the Indian market.