FIPB defers Gland Pharma acquisition by Chinese firm

Clears 9 other proposals, including Vodafone’s and Netmagic’s

The Foreign Investment and Promotion Board (FIPB) has deferred Gland Pharma’s Shanghai Fosun deal worth $1.4 billion.

It approved nine investment proposals, including those of Netmagic Solutions and Vodafone, totalling a foreign investment of ~659 crore. The inter-ministerial body, to be soon wound up, recommended to the Cabinet Committee on Economic Affairs (CCEA) a proposal by Apollo Hospitals to raise fresh equity shares for ~750 crore through foreign investment.

China’s Shanghai Fosun planned to acquire 86 per cent stake in India’s Gland Pharmaceuticals in July last year. The latter is a Hyderabad-based company, specialising in injectables and supplying these to other companies. This was the first deal in the sector after the Centre eased the foreign direct investment limit in pharma companies, in May. It had decided to allow up to 74 per cent through the automatic route. In the US, Gland supplies 65 products and around 150 in other emerging markets. The Chinese drug maker planned to leverage these capabilities to expand its product offerings. It would gain access to seven manufacturing sites, three in Vizag and four in Hyderabad.

FIPB cleared proposals of Netmagic Solutions entailing an investment of ~534 crore and Vodafone India of ~55 crore. Beside Apollo, it recommended proposals of ~900 crore from Star Technologies and ~789 crore of Flag Telecom Singapore Pte to the CCEA.