Torrent Pharmaceuticals said today it is acquiring the domestic branded formulations business of Elder Pharmaceuticals in India and Nepal for Rs. 20.04 billion ($324 million), in a deal that builds the acquiring company’s marketshare and keeps the Elder operations under Indian ownership.

Elder’s India business comprises a portfolio of over 30 brands with products across the women’s healthcare, pain management, wound care, and neutraceuticals therapeutic segments. Employees engaged in sales, marketing, and operations of the India business will transfer to Torrent, while Elder will retain its manufacturing operations and continue to manufacture and supply the products at its existing facilities for Torrent for a period of three years.

The companies believe Elder’s existing brand equity in the areas of women healthcare and pain management will help Torrent strengthen its position in the Indian market by expanding into 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’s healthcare, pain management, and vitamins/nutrition segments by enhancing and accelerating market access. It is also expected to enable cost and revenue synergies in Torrent’s domestic formulations business,” Sudhir Mehta, Torrent Group’s chairman, said in the companies’ joint statement.

The boards of directors of both companies have approved the deal, which is subject to customary conditions and precedents including shareholder approval and applicable regulatory approvals. The acquisition is expected to close in the first half of 2014.

Torrent will fund the acquisition value through a mix of internal accruals and bank debt, the companies said.

“This path-breaking domestic consolidation by Torrent addresses our recent challenges and will significantly help Elder deleverage its balance sheet. We will now focus and grow our in-licensing, anti-invectives and exports business,” said Alok Saxena, Elder’s managing director and CEO.

Elder touched off the sale by saying in June it was evaluating strategic options; later news reports identified global asset management firm The Carlyle Group and three pharma giants—GlaxoSmithKline, Novartis, and Sanofi—as prospective suitors.

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