Dose of Dominance—Torrent Aims for Full Control with JB Chemicals Open Offer

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Torrent Pharmaceuticals Ltd. launched a formal ₹6,842.8 crore open offer to buy as much as 26% holding in JB Chemicals & Pharmaceuticals Ltd. at a price of ₹1,639.18 per share, as per a filing with the stock exchanges. This comes after Torrent's record deal to buy a 46.39% controlling stake in JB Chemicals from global investment firm KKR, valuing the company at ₹25,689 crore on a fully diluted basis.

The open offer is part of a two-step transaction that will lead to the consolidation of JB Chemicals into Torrent Pharma, one of India's most diversified and future-proofed pharmaceutical platforms.

Open Offer Terms

Torrent Pharma will acquire up to 4.17 crore shares (26%) from public share holders.
Offer price: ₹1,639.18 per share, an 8.9% discount to the last traded price of JB Chemicals' at ₹1,799.35.
Total size of open offer: ₹6,842.8 crore (assuming full acceptance).

Phase 1: Share Purchase Agreement (SPA)

Torrent to acquire 46.39% stake from KKR at ₹1,600/share for ₹11,917 crore.
Additional 2.8% stake to be acquired from JB Chemicals employees at the same price.

Phase 2: Merger

JB Chemicals to be consolidated with Torrent Pharma under a scheme of arrangement
Share swap ratio: 100 shares of JB Chemicals = 51 shares of Torrent Pharma.

Strategic Rationale

Market Expansion: Reinforces Torrent's leadership in chronic disease therapy and enters new therapeutic classes like ophthalmology.
Entry into CDMO: Gains access to JB's strengths in contract development and manufacture (CDMO) including medicated lozenges.
International Presence: Strengthens Torrent's presence in key international markets like Russia and South Africa.
Synergies: Will unveil operating efficiencies and enhance profitability at local and international operations.

This strategic fit works to strengthen our aim of creating a larger, diversified global presence," Torrent Pharma Executive Chairman Samir Mehta said.

Sources: MSN, Economic Times, Indian Express, Fortune India

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