China’s Fosun Pharma to bypass India’s regulatory hurdles after cutting stake in Gland Pharma deal
Chinese drug maker to cut the stake it wants to buy in India’s Gland Pharma to ensure faster regulatory approvals
Shanghai-based Fosun Pharmaceutical Development Co. announced on Sunday that it has trimmed the size of the stake it wants to buy in India’s Gland Pharma, a move set to help the firm bypass regulatory hurdles from Indian authorities.
The Chinese drug maker said in an exchange filing that it cut the size of the stake it wanted to buy in Gland Pharma from 86 per cent for US$1.26 billion to 74 per cent for about US$1.09 billion.
“Given that Gland Pharma’s operation is in good condition, the founder shareholders propose to maintain a higher stake in Gland Pharma without impact on the acquisition of the controlling interest by Fosun Pharma Group,” said Chen Qiyu, co-president of Fosun Pharma.
Following the amendment, the deal no longer needs approval from the India Foreign Investment Promotion Board, as well as the Cabinet Committee on Economic Affairs of India, two key government departments that were deciding whether the acquisition deal could proceed under the original terms.
“The approvals of the relevant [Chinese] authorities and the United States antitrust filings and Indian antitrust filings in respect of the transactions have been completed,” Fosun Pharma said in its filing.
“Meanwhile, no review and approval of the India Foreign Investment Promotion Board and the Cabinet Committee on Economic Affairs of India is required in relation to the transactions contemplated under the amendments to the transaction documents under the relevant Indian foreign investment policies,” the company said.
The company also said it would pay no more than US$25 million for the Indian firm’s prototype sales of Enoxaparin in the US, cutting the previously proposed amount by half.
The closing date of the Gland deal has been delayed from September 26 to October 3.
In August The Times of India reported that Fosun Pharma’s proposed acquisition of Gland Pharma was put on hold by Indian authorities over concerns about foreign ownership of one of the country’s export quality medicine producers.
The Chinese company wants to upgrade its drug manufacturing business, as well as increase its market share in the injectables segment in India, in which Gland Pharma is a leading player.
Founded in 1978, Gland Pharma currently has a presence in about 90 countries.