Gland Pharma’s founders and US private equity firm KKR, who jointly hold roughly 96 percent of the Indian drugmaker, will sell nearly all of their stake to Fosun, said the person, who was not authorised to speak on the matter ahead of a formal announcement and so declined to be identified. The deal may need FIPB approval.
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The deal would be the first major move by the Fosun group since Guo Guangchang, founder of flagship holding firm Fosun International Ltd (0656.HK) and one of China’s best-known entrepreneurs, briefly went missing late past year.
In June, Indian media reported that Shanghai Fosun Pharmaceutical (Group) has emerged as the frontrunner to acquire Gland Pharma after U.S. giant Baxter and private equity company Advent backed out from the race. Shanghai Fosun seeks to gain Gland Pharma’s technical capabilities, which specialize on injectables, through the acquisition.
Jefferies were running a formal auction process.
Foreign businesses and investors can now buy up to 74% of Indian drugmakers without government approval, a change announced last month as one of a series of measures relaxing rules on foreign investment and further liberalizing India’s economy. The deal would allow the Chinese company to gain control of a new stable of injectable medicines as well as manufacturing facilities in India.
Chen Qiyu, chairman of Fosun Pharma, said in a statement that the Gland Pharma deal will strengthen the firm’s global presence and accelerate the speed of its internationalization. Its market value was $8.3 billion as of 31 December 2015. Fosun’s portfolio covers liver diseases, diabetes, tuberculosis and diagnostic products, and it’s also the leading provider of anti-malaria medicines globally. ICRA estimates the USA injectables market to grow at about 10 percent annually over five years.
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In November 2013, KKR bought an undisclosed stake in Gland from Evolvence India Life Sciences Fund for about $191 million, valuing the company at $600-650 million at the time.
