Torrent Pharmaceuticals, based in Ahmedabad, has sought approval from fair trade regulator CCI to acquire a majority stake in J B Chemicals and Pharmaceuticals for Rs 19,500 crore.

After the transaction, Torrent Pharmaceuticals will be India's second most valuable pharmaceutical company.

Key Highlights

• Torrent seeks CCI approval for ₹19,500 crore deal, set to become India’s second‑largest pharma firm. 
• Deal includes 46.4% stake from KKR, 2.8% from employees, followed by mandatory 26% open offer. 

The development came after Torrent Pharmaceuticals announced in June this year that it would acquire a majority stake in J B Chemicals and Pharmaceuticals for Rs 19,500 crore.

According to a notice filed with the Competition Commission of India (CCI), the proposed combination relates to the acquirer (Torrent Pharmaceuticals Ltd) acquiring a shareholding in the target (J B Chemicals & Pharmaceuticals Ltd) and then amalgamating the target with the acquirer.

Torrent Pharmaceuticals is the Torrent group's flagship company, and it manufactures and sells pharmaceutical formulations (FDFs) across therapeutic segments.

J B Chemicals & Pharmaceuticals manufactures and markets a wide range of FDFs and APIs (Active Pharmaceutical Ingredients), as well as offering CDMO (Contract Development and Manufacturing Organisation) services.

The parties (Torrent Pharma and J B Chemicals) stated that their activities overlap in certain relevant markets for the manufacture and sale of FDFs in India.

In June, Torrent announced that it would acquire a 46.39 percent stake from promoters Tau Investment Holdings Pte Ltd, an affiliate of global investment firm KKR, for approximately Rs 11,917 crore. It would also buy an additional 2.80 percent from certain JB Chemicals employees at the same acquisition price of Rs 1,600 per share (a total of Rs 719 crore).

Following that, it will make an open offer to buy 26% of the stock from the open market at a price of Rs 1,639.18 per share (for a total of Rs 6,842.8 crore).

This will be the second largest deal in pharmaceutical history, following Sun Pharmaceutical Industries' 2015 acquisition of Ranbaxy Laboratories. JB Pharma will merge with Torrent following its share purchase.

In 2020, KKR acquired a 65 percent stake in JB Chemicals & Pharmaceuticals. In March of this year, KKR sold a 5.8 percent stake in JB Pharma for Rs 1,460 crore via open market transactions.

JB Pharma, founded in 1976, manufactures a variety of pharmaceuticals in fields such as gastroenterology, dermatology, and diabetes. Torrent Pharma, with annual revenues exceeding Rs 11,500 crore, is the flagship company of the Torrent Group, which has total revenues of Rs 45,000 crore.

Also Read: Torrent Pharma to Acquire 46.39% Stake in JB Chemicals for Rs 25,689 Cr

Sun Pharma announced in April 2014 that it would acquire troubled rival Ranbaxy in an all-stock transaction valued at USD 4 billion, including USD 800 million in debt. The merger was 'consummated' in March 2015, a year after receiving the necessary approvals.

Last year, Mankind Pharma completed the acquisition of Bharat Serums and Vaccines for Rs 13,768 crore.