Torrent Pharma to Acquire Controlling Stake in JB Chemicals in INR 266 Billion Deal
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Torrent Pharmaceuticals has entered into definitive agreements to acquire a controlling 49.2 per cent stake in JB Chemicals & Pharmaceuticals (JBCP) for Rs 126.4 billion. The deal, structured in phases and inclusive of a share swap for the remaining stake, places the enterprise value of JBCP at INR 266.3 billion, adjusted for FY25 net cash. The development was announced in a press release issued by Equirus Securities.
The acquisition involves Torrent Pharma buying a 46.39 per cent stake from global investment firm KKR and an additional 2.8 per cent from JBCP employees, both at INR 1,600 per share. Following this, Torrent will extend a mandatory open offer to public shareholders for up to 26 per cent at INR 1,639 per share. The second phase involves merging JBCP into Torrent, offering 51 Torrent shares for every 100 JBCP shares, valuing the remaining 50.8 per cent at INR 140.4 billion. The transaction is expected to conclude within 15–16 months, subject to regulatory approvals including the Competition Commission of India, anticipated within six months.
Once completed, the deal will make Torrent the fifth-largest pharma company in India by revenue. JBCP draws nearly 80 per cent of its domestic revenue from gastrointestinal and cardiac therapies.
Torrent anticipates procurement and distribution efficiencies in the near term, along with field-force optimization. Longer-term revenue gains are expected from broader prescription reach, deeper penetration in international markets, and scaling of JBCP's acute, ophthalmology, and CDMO segments. The combined entity is projected to deliver margin gains of 350–400 basis points over the next three years.
While the deal is likely to be earnings dilutive in the first year, Torrent expects to break even by FY27 and reach EPS accretion by FY28. Return on capital employed (ROCE) is projected to return to pre-deal levels of 28 per cent by the same year, supported by operational synergies. Equirus estimates a payback period of 14–15 years and sees the company's leverage easing within four to five years post-deal. The company remains confident about navigating regulatory hurdles, although some divestments may be necessary to satisfy antitrust requirements.
This acquisition marks Torrent's strategic push to solidify its position in India while tapping into JBCP's established international footprint in the US, Russia, and South Africa, and entering new therapy areas such as ophthalmology and nephrology.
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