China’s Fosun inks US$1.3 billion deal for Indian pharma company

PUBLISHED : Friday, 29 July, 2016, 12:00pm
UPDATED : Friday, 29 July, 2016, 12:01pm

Shanghai-based conglomerate Fosun said on Thursday it has inked a US$1.3 billion deal to buy the controlling interest in an Indian pharmaceutical company held by private equity fund KKR and the company’s founders.

Its target, Gland Pharma, is a 38-year old specialist manufacturer of injection drugs and the only India-based company to have secured the US Food & Drug Administration department’s approval for the medicines it manufactures and sells from India. Its key markets are located in US and Europe.

Gland Pharma’s technology and drug portfolio can be applied to a large range of health conditions and applications – from cancer treatment and cardiovascular conditions to diagnosis.

If successful, the deal will be the largest Chinese investment into the Indian pharmaceutical sector. Fosun aims to secure all the necessary approvals and close the deal by the end of 2018.

“Gland Pharma is run by a tip top management team. It has grown into a leading Indian corporate with international span and influence under KKR’s incubation,” said Fosun Pharma chiefChen Qiyu.

“Buying out Gland Pharma will mark an important milestone in Fosun Pharma’s process to internationalise.

“China and India’s goals in pharmaceuticals are actually highly compatible. I hope Fosun and Gland Pharma’s combination will prove to be a step forward for pharmaceutical innovation and generic drugs exports in the way forward.”

When completed, the deal will give Fosun exposure to the lucrative US and European markets, where Gland Pharma receives the bulk of its revenue, while keeping costs low and maintaining access to cutting edge Indian innovation.

In the disclosure document for the deal, the company said the investment will require a four-way approval: first from the antitrust and foreign investment authorities of India, followed by the antitrust regulator in the US, and finally China’s own National Development & Reform Commission.

KKR and the Gland Pharma founders are entitled to walk away with as much as US$40 million in termination fees if the deal fails to close without the approvals.