Torrent Pharmaceuticals to Consider Debenture/Bond Issuance Amid KKR Sale of JB Chemicals Stake.

Torrent Pharmaceuticals is considering debenture/bond issuance and has agreed to acquire a 47.73% stake in J.B. Chemicals & Pharmaceuticals from KKR Asian Fund III for approximately INR 120 billion. The company also proposed to acquire a 26% stake in J.B. Chemicals & Pharmaceuticals for INR 68.4 billion and a 2.8% stake in J.B. Chemicals & Pharmaceuticals from certain employees for INR 7.2 billion.

Torrent Pharmaceuticals, a leading player in the Indian pharmaceutical sector, has sought clearance from the Competition Commission of India (CCI) to acquire a majority stake in J.B. Chemicals & Pharmaceuticals. The acquisition, valued at Rs 19,500 crore, is set to position Torrent as India's second most valued pharma company [1].

The proposed acquisition involves a complex series of transactions. Torrent will initially acquire 46.39% stake from Tau Investment Holdings Pte Ltd, an affiliate of global investment firm KKR, for approximately Rs 11,917 crore. Additionally, it will buy another 2.80% stake from certain employees of JB Chemicals for Rs 719 crore. Post this, Torrent will make an open offer to acquire an additional 26% stake from the open market for Rs 6,842.8 crore [1].

The acquisition of J.B. Chemicals & Pharmaceuticals, which is engaged in the manufacturing and marketing of diverse pharmaceutical formulations and Active Pharmaceutical Ingredients (APIs), will bring significant synergies to Torrent. Both companies operate in overlapping markets for the manufacturing and sale of pharmaceutical formulations in India [1].

Torrent Pharmaceuticals, with annual revenues exceeding Rs 11,500 crore, is the flagship company of the Torrent Group, with group revenues of Rs 45,000 crore. J.B. Chemicals & Pharmaceuticals, established in 1976, produces a range of pharmaceuticals in areas such as gastroenterology, dermatology, and diabetes [1].

This deal is set to be the second biggest in the Indian pharma sector, trailing only Sun Pharmaceutical Industries' 2015 acquisition of Ranbaxy Laboratories. The proposed acquisition is subject to CCI approval and is expected to be completed once all regulatory clearances are in place [1].

References:
[1] https://m.economictimes.com/industry/healthcare/biotech/pharmaceuticals/torrent-pharma-seeks-cci-nod-to-acquire-majority-stake-in-jb-chemicals-for-rs-19500-crore/articleshow/122720051.cms