A JB Chemicals factory in Gujarat in western India.
Torrent Pharmaceuticals—backed by India billionaire brothers Sudhir and Samir Mehta—has agreed to buy U.S. private equity giant KKR’s stake in JB Chemicals and Pharmaceuticals in a deal valued at 119.1 billion rupees ($1.4 billion).
Torrent Pharma will buy a 46.4% stake in JB Pharma at 1,600 rupees per share and will also purchase up to 2.8% of shares from certain employees at the same price. It will then make an offer to buy an additional 26% stake at 1,639.18 rupees each, paying minority shareholders a slight premium. The transaction values JB Pharma at 256.8 billion rupees ($3 billion), according to a joint announcement released on Sunday.
“This strategic alignment furthers our goal of strengthening our presence in the Indian pharma market, and building a larger diversified global presence,” Samir Mehta, executive chairman of Torrent Pharma said in the statement.
After completing the transaction, the two companies will be merged with every shareholder holding 100 shares in JB Pharma receiving 51 shares of Torrent. The deals are subject to regulatory approvals.
The deal grants Torrent Pharma access to a fast-growing drug business in India. Founded in in 1976, JB Pharma produces a range of drugs for gastroenterology, hypertension, dermatology and diabetes, according to its website. It exports its products to more than 40 countries, including the U.S.
“As we now enter a new chapter alongside Torrent Pharmaceuticals, we are confident that the combined strengths of our organizations will unlock greater opportunities to enhance healthcare access across our markets,” Nikhil Chopra, CEO of JB Pharma said.
With an estimated net worth of $16.3 billion, the Mehta brothers are among India’s wealthiest, according to India’s 100 Richest list released by Forbes Asia last October. Most of their wealth comes from Torrent Pharma, the main company of the $4.9 billion (revenue) Torrent Group. The 64-year-old company was founded by their late father, Uttambhai Nathalal Mehta, a former salesman for Swiss pharma giant Sandoz.