In a major consolidation move in the Indian pharmaceutical sector, Torrent Pharmaceuticals Limited has announced a mandatory open offer to acquire up to 26% of the expanded share capital of J.B. Chemicals & Pharmaceuticals Limited, a renowned name in the healthcare segment. This acquisition plan is in line with SEBI (SAST) Regulations, and comes after Torrent entered into a share purchase agreement with JB Chemicals' existing promoter entity, Tau Investment Holdings Pte. Ltd.

This open offer, valued at a substantial ₹6,842.80 crore, is a pivotal moment that has captured investor and industry attention. Priced at ₹1,639.18 per share, the offer targets the acquisition of 4,17,45,264 fully-paid-up equity shares, representing 26.00% of the expanded share capital of JB Chemicals.

The transaction’s magnitude and structure reflect a strategic alignment in Torrent’s expansion vision, signaling aggressive growth and market consolidation ambitions. This comes on the heels of Torrent’s agreement to buy a 46.39% stake from JB Chemicals' promoter for a consideration of ₹1,600 per share, amounting to ₹11,917 crore in total.

The purpose of this open offer stems from the legal obligation under Regulations 3(1) and 4 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, which mandates an acquirer crossing the 25% shareholding threshold to make an offer to the public shareholders. The transaction will result in Torrent Pharma taking control of JB Chemicals, with the promoter seller being reclassified as public, and Torrent emerging as the new promoter under the SEBI (LODR) framework.

In addition to the public acquisition, Torrent has proposed a merger between JB Chemicals and itself, aimed at further strengthening operational synergy. The proposed Scheme of Amalgamation, approved by both boards, under Sections 230 to 232 of the Companies Act, 2013, will result in JB Chemicals being merged into Torrent Pharma as a going concern. Under this scheme, shareholders of JB Chemicals (except Torrent itself) will be allotted shares in Torrent Pharma at a pre-agreed swap ratio.

From an investor standpoint, this deal reflects Torrent's confidence in JB Chemicals’ value proposition, and its potential to add to Torrent's revenue streams, R&D capabilities, and international market penetration. This open offer is not subject to minimum acceptance conditions and is not a competing offer, further confirming Torrent’s firm commitment.

Interestingly, JB Chemicals’ stock has been under active trade on both NSE and BSE under the symbol JBCHEPHARM, and is considered frequently traded under SEBI norms, which partly helped determine the offer price under Regulations 8(1) and 8(2) of SEBI SAST Regulations.

Tau Investment Holdings, which currently holds 46.39% of the company, will exit completely post-transaction. Once completed, Torrent Pharma’s shareholding will rise to 72.39%, assuming full acceptance of the offer. This includes both the promoter stake and the public offer stake.

As part of the larger transaction ecosystem, Torrent also plans to purchase up to 44,99,782 equity shares from employees, representing an additional 2.80% stake, under the employee stock option plan (ESOP) mechanism, at a price not exceeding ₹1,600 per share.

However, such substantial acquisition could lead to public shareholding falling below mandatory thresholds under Rule 19A of the Securities Contracts (Regulation) Rules, 1957. Torrent has clarified it will take necessary corrective actions to ensure compliance before the effective date of the merger.

Furthermore, the Required Statutory Approvals that stand between the deal and its conclusion include:

• Approval from the Competition Commission of India (CCI)

• Approval of Torrent Pharma’s shareholders under the Companies Act for expanding borrowing and investment limits for the acquisition

Torrent Pharma, through this ₹6,842 crore open offer, is not only acquiring a stake but also stepping into a controlling and transformative role in JB Chemicals’ future. The entire process has been structured with the assistance of NovaaOne Capital Private Limited, which is acting as the Manager to the Open Offer.

The next step in the regulatory process is the publication of the Detailed Public Statement (DPS), which Torrent Pharma will issue by July 4, 2025, within the mandated five working days. This document will contain exhaustive details, including statutory approvals, financial arrangements, swap ratios, and other merger-related terms.

The entire acquisition and open offer process will be guided and governed under SEBI (SAST) Regulations, ensuring transparency, shareholder protection, and corporate governance. While Torrent’s immediate intent is acquisition, the long-term strategic vision appears to be full integration through the proposed amalgamation—enhancing operational efficiency, simplifying structure, and ensuring scalable growth.

In conclusion, Torrent Pharmaceuticals' ₹6,842 crore open offer to acquire 26% stake in JB Chemicals, following a promoter exit worth ₹11,917 crore, sets the stage for one of the largest pharmaceutical consolidations in India in 2025. The merger proposal, ESOP purchases, and future reclassification of promoter entities make this deal a multi-layered transaction that reflects the growing ambition and scale of Indian pharma giants.

This bold move is expected to reshape the competitive landscape, delivering both investor value and strategic expansion as Torrent Pharma positions itself as a dominant player in the Indian pharmaceutical industry.

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