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In one of the biggest acquisition by a Chinese company in India, Shanghai Fosun Pharmaceutical Group Co Ltd has agreed to buy 86 per cent in Gland Pharma for about $1.3 billion. Gland Pharma, backed by private equity firm KKR & Co LP, has a strong portfolio in injectable drugs. The deal overtakes investments made by Chinese e-commerce giant Alibaba in India’s booming online retail sector.
Gland Pharma, based in Hyderabad, owns four factories from where it supplies a variety of injectables — widely used medicines administered through vials, syringes, bags and pumps, which are harder to make than regular medicines. Fosun is a large Chinese conglomerate with multiple business arms. In the pharmaceutical sector, Fosun has strong presence in markets like Africa, Europe and Japan. Gland will be able to use Fosun’s presence in these markets to expand its footprint.
However, the deal will have to be approved by Indian authorities, including the FIPB. Since Fosun plans to acquire 86 per cent stake in Gland, the deal will go through Government scrutiny. Also, as China is considered to be a hostile country, any investments from there, especially in critical sectors such as pharmaceuticals, could see higher levels of scrutiny, said a market expert dealing with M&A approvals.
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