Fosun to acquire 74% stake in Gland Pharma for $1.1 bn

Excerpt: The arrangement between India's Gland Pharma and China's Fosun Group was generally estimated to have been obstructed by the Indian government

The arrangement between India's Gland Pharma and China's Fosun Group was generally estimated to have been obstructed by the Indian government

Shanghai Fosun Pharmaceutical Group Co. Ltd, a unit of China's Fosun Group has consented to get 74% of Indian drug company Gland Pharma Ltd for $1.1 billion, the Chinese drugmaker said on Sunday, restoring an arrangement that was generally hypothesized to have been obstructed by the Indian government.

Fosun has consented to cut the size of the stake it will purchase in Gland Pharma to 74%, having already focused on a 86% stake valued at about $1.26 billion.

Fosun in an announcement to the stock exchanges said that its board had approved the new arrangement to obtain 74%, which would see an investment of up to $1.09 billion. The firm has likewise deferred the finalizing date for the negotiations to 3 October from 26 September, Reuters included.

The investors of Gland Pharma Ltd, including buyout firm KKR and Co., were thinking about offering a stake of up to 74% under the automatic approval route to Fosun International after failing to secure government approval for an 86% stake deal. The new structure was being considered as an option, on the off chance that approval for the deal, pending before the Cabinet Committee of Economic Affairs (CCEA) did not come through.

Regulations reported in June a year ago permit Foreign direct Investment (FDI) of up to 74% in existing pharmaceutical firms through the automatic route, while permitting foreign investments that include getting over 74% through the govt. approval route.

Hong Kong-listed Shanghai Fosun Pharmaceutical (Group) Co. Ltd has agreed to get roughly 86% in Gland Pharma for $1.3 billion in July 2016. The arrangement was cleared by the Foreign Investment Promotion Board (FIPB) in March, while the Competition Commission of India had affirmed it earlier in December 2016. FIPB referred the arrangement to CCEA in April.

With an expansion in the shareholding from the prior thought about deal, Dr. Ravi Penmetsa and his father P.V.N. Raju will proceed on the leading group of the organization and the present administration group will be responsible for the everyday running of the organization, the announcement said.

Organ Pharma, established in 1978, makes generic injectables, principally for the US amarket. The organization additionally sells its products in India and some other countries.

KKR had procured near 36% in the organization in 2013 for $200 million from Evolvence India Life Sciences Fund. KKR's 36% stake is currently esteemed at $540 million.

Are you sure you want to

×