CCI Clearance Sought For Torrent Pharma's ₹19,500 Crore Acquisition Of J B Chemicals

CCI Clearance Sought For Torrent Pharma's ₹19,500 Crore Acquisition Of J B Chemicals

Introduction

Ahmedabad-based Torrent Pharmaceuticals has sought fair trade regulator CCI's clearance to acquire a majority stake in J B Chemicals and Pharmaceuticals in a ₹19,500-crore deal. The acquisition would make Torrent Pharmaceuticals India's second-most valued pharma company.

Factual Background

Torrent Pharmaceuticals is engaged in the business of manufacturing and sale of pharmaceutical formulations (FDFs) across therapeutic segments. J B Chemicals & Pharmaceuticals is engaged in the business of manufacturing and marketing of a diverse range of FDFs and APIs (Active Pharmaceutical Ingredients) and also provides CDMO (Contract Development and Manufacturing Organisation) services.

Procedural Background

The proposed combination relates to the acquisition of shareholding by Torrent Pharmaceuticals in J B Chemicals & Pharmaceuticals and the subsequent amalgamation of J B Chemicals & Pharmaceuticals with Torrent Pharmaceuticals. Torrent Pharmaceuticals has filed a notice with the Competition Commission of India (CCI) seeking clearance for the deal.

Reasoning & Analysis

The parties have acknowledged that their activities exhibit horizontal overlaps in certain relevant markets for the manufacturing and sale of FDFs in India. The CCI will likely examine the proposed combination to determine whether it would have any adverse impact on competition in the relevant market.

Market Impact

The acquisition is expected to significantly alter the competitive landscape of the Indian pharmaceutical market. The combined entity would have a strong presence in various therapeutic segments and a robust portfolio of products.

Implications

The acquisition would make Torrent Pharmaceuticals India's second-most valued pharma company. The deal would also consolidate the position of Torrent Pharmaceuticals in the Indian pharmaceutical market.

Final Outcome

The CCI's clearance is awaited for the proposed combination. If approved, the deal would be the second-biggest in the pharma sector ever, behind Sun Pharmaceutical Industries' 2015 acquisition of Ranbaxy Laboratories.