Torrent to acquire Elder's Indian branded formulations business for Rs 2000 crores

Torrent Pharmaceuticals Limited, the flagship company of the Torrent Group, has entered into a definitive binding agreement with Elder Pharmaceuticals Limited to acquire Elder’s branded domestic formulations business in India and Nepal (‘India Business’) for a consideration of about Rs 2000 crores. Elder's India Business comprises a portfolio of 30 brands including market leading brands in the Women's Healthcare, Pain Management, Wound Care and Nutraceuticals therapeutic segments.
 
“The identified India Business is being sold as a going concern on a slump sale basis and the transaction will also involve the transfer of employees engaged in sales, marketing and operations of the India Business. Under the proposed transaction, Elder will continue to manufacture & supply the products at its existing manufacturing facilities for Torrent for a period of three years,” said Torrent in a press release.
 
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Elder's existing brand equity in the areas of women healthcare and pain management will help Torrent strengthen its position in the Indian market expanding into these fast growing areas.
 
"The transaction is a strategic fit for Torrent and will strengthen its core prescription-based business. This acquisition strengthens our position in the Women Healthcare, Pain management & Vitamins/Nutrition segments by enhancing & accelerating market access. It is also expected to enable cost & revenue synergies in Torrent's domestic formulations business,” said Sudhir Mehta, Chairman, Torrent Group.
 
Alok Saxena, Managing Director and CEO, Elder, added, “This path breaking domestic consolidation by Torrent addresses our recent challenges and will significantly help Elder de-leverage its balance sheet. We will now focus and grow our in-licensing, anti-infectives and exports business.”
 
The transaction has been approved by the Boards of Directors of both companies. The transaction is subject to conditions precedent including shareholder approval and applicable regulatory approvals and is expected to close in the first half of 2014.