China’s Fosun Group grabs 74% stake in India’s Gland Pharma for $1.1 billion
pharmafile | September 18, 2017 | News story | Sales and Marketing | China, Fosun Pharma, Gland Pharma, India, pharma, pharmaceuticals
Chinese conglomerate Fosun has agreed to acquire 74% of India’s Gland Pharma for $1.1 billion, sealing a previously unsuccessful deal which was thought to have been blocked by the Indian government.
Shanghai Fosun Pharmaceutical Group, the unit of Fosun which will make the acquisition, had previously been aiming to grab 86% of the company for around $1.26 billion with an attempt made in July last year. While the move was given approval from the Competition Commission of India and the Foreign Investment Promotion Board (FIPB), when referred to the Cabinet Committee of Economic Affairs (CCEA), the buyout bid was reportedly blocked.
Other explanations have included increased border tensions between India and China as well as concerns over the transfer of technology to Chinese firms.
Following this, it was reported that shareholders of Gland Pharma began to consider a new deal, taking advantage of new regulations implemented in 2016 which allow for foreign direct investment of up to 74% of existing pharmaceutical firms through the automatic approval route.
“While an original agreement was entered into over a year ago, a number of approvals already obtained globally are nearing expiration and the parties have agreed to a revised shareholding agreement to complete the deal,” Gland Pharma announced. “The partnership will leverage synergies as foreseen by the management teams of both Gland Pharma and Fosun Pharma. Some of these synergies include the bio-similar programme developed at Fosun being made available for manufacturing by Gland Pharma and introducing them to the Indian market. Furthermore, the partnership will create new channels to sell the products of Gland Pharma in markets where Fosun has an existing presence.”
The company announced that its board had approved the new deal while also delaying its closing date to 3 October from 26 September.
Matt Fellows
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