Fosun scales back Gland Pharma bid

HONG KONG/BEIJING: Shanghai Fosun Pharmaceutical Group Co scaled back its proposed purchase of control in Indian drugmaker Gland Pharma Ltd to a level that would allow it to avoid a government review of the biggest Chinese acquisition in India.

Fosun Pharma, backed by Chinese billionaire Guo Guangchang, would now buy a 74 per cent stake for US$1.1 billion (RM4.61 billion), according to a statement on Sunday.

It had originally sought to buy an 86 per cent stake in the closely-held Indian drugmaker from an investor group including KKR & Co. However, a stake that size must be signed off by the Cabinet Committee on Economic Affairs, which was poised to reject the move, Bloomberg reported August 1, citing people familiar.

The reduced stake would avoid a government review, said Fosun, and the deal was set to complete by October 3 as all the main conditions had been met.

The deal gives the Chinese firm access to Gland’s stable of generic injectable medicines and control of facilities to export to the United States and other developed markets.

Fosun Pharma shares jumped as much as 4.3 per cent in Shanghai yesterday. Shares of Fosun International Ltd, Fosun Pharma’s largest shareholder, jumped as much as 9.7 per cent to HK$16.46 (RM8.82) in Hong Kong, the highest since August 2015.

Last year, new Indian rules allow stake purchases of up to 74 per cent in existing pharmaceutical companies to go through an automatic route that doesn’t require government approval.

Founded in 1978, Hyderabadbased Gland’s manufacturing facilities have been accepted by several regulatory agencies including the US Food and Drug Administration, giving it access to the world’s biggest pharmaceutical market.

Fosun Pharma has been increasing ambitious in buying assets overseas in a push to both acquire innovative pipelines and seek revenue growth as China’s pharmaceutical market slows. Bloomberg