Elder Pharmaceuticals (Elder) has entered into a definitive binding agreement with Torrent Pharmaceuticals (Torrent). Torrent will acquire its branded domestic formulations business in India and Nepal (India Business) for a consideration of Rs 2,004 crore. Elder's India Business comprises a portfolio of over 30 brands with market leading products across the Women's Healthcare, Pain Management, Wound Care and Neutraceuticals therapeutic segments.
The 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.
Torrent would fund the acquisition value through a mix of internal accruals and bank debt. 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 has been approved by the Boards of Directors of both companies. The transaction is subject to customary conditions precedent including shareholder approval and applicable regulatory approvals and is expected to close in the first half of 2014.
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