Torrent to buy Elder’s India, Nepal business for Rs2,000 crore

In an M&A deal between two Indian drug makers, Ahmedabad-based Torrent Pharmaceuticals today said it is acquiring Mumbai-based Elder Pharmaceuticals' branded formulation business in India and Nepal for Rs2,000 crore.

''Torrent has entered into a definitive binding agreement with Elder to acquire its branded domestic formulations business in India and Nepal for a consideration of Rs2,000 crore,'' Torrent Pharmaceuticals Ltd. said in a filing with the Bombay Stock Exchange.

Torrent would fund the acquisition through a mix of internal accruals and bank borrowings, the company said.

''The transaction is a strategic fit for Torrent and will strengthen its core prescription business. This acquisition strengthens our position in the women's healthcare and pain management segments,'' Torrent group chairman Sudhir Mehta said.

Elder chief executive and managing director Alok Saxena said, ''This path-breaking domestic consolidation by Torrent addresses our recent challenges and will significantly help Elder leverage its balance sheet.''

The transaction has been approved by the boards of both the companies and is subject to approval by shareholders and other regulatory approvals. The deal is expected to close in the first half of 2014.

Elder's India business is being sold as a going concern on a slump-sale basis.

The transaction will also involve the transfer of employees engaged in sales, marketing and operations of Elder in India.

Under the proposed transaction, Elder will continue to manufacture and supply the products at its existing manufacturing facilities for Torrent for a period of three years.