Torrent to acquire Unichem’s India biz

Bengaluru, Nov. 3: Torrent Pharmaceuticals on Friday said it would buy more than 120 brands from Unichem Laboratories in India and Nepal, and its manufacturing plant at Sikkim.

The `36 billion ($558 million) deal will be funded by internal accruals and bank borrowing, the Ahmedabad, Gujaratbased drugmaker said in a stock exchange filing.

The acquisition is on a going concern basis and is expected to deliver cost and revenue synergies in Torrent’s branded drugs business in India, the company added.

Unichem has not been able to leverage its slowgrowing, mature brands portfolio, analyst said. But Torrent will be able to turn them around, as it has done with Elder Pharmaceuticals, they added.

Torrent acquired Elder Pharma’s branded formulations business for about `20 billion in 2014.

Analysts expect Unichem to use the proceeds from the deal to ramp up its unprofitable international business.

The transaction will strengthen Torrent’s position in cardiology, diabetology, gastro-intestinals and central nervous systems therapies, Torrent chairman Samir Mehta said.

The deal includes the purchase of the brand Unienzyme, allowing Torrent to enter the overthe-counter drugs market, as well as brands including Losar, Ampoxin and Telsar.

Under the acquisition, which is expected to close by the end of 2017, more than 3,000 Unichem staff will join Torrent.

Both companies reported September-quarter results on Friday, with Torrent posting a 1.4 percent drop in profit, while Unichem’s profit more than doubled.