Fosun Pharma to Buy 74% Stake in Gland Pharma for US$1.1 Billion

Published By : 18 Sep 2017 | Published By : QYRESEARCH

Chinese companies are buying stakes in India at a rapid rate, and deals are only getting bigger by the day, which is facing objections from the government. Initially, Shanghai Fosun Pharmaceutical Group Co. had offered to buy 86 percent stake in the Indian drugmaker Gland Pharma Ltd., potentially the biggest Chinese acquisition in India. The sheer substantiality of the deal would have invited a review by the Cabinet Committee on Economic Affairs, and the possibilities of a rejection were ripe.

The proposed deal was worth US$1.35 billion, 16 times of the total earnings of Gland Pharma in the financial year 2016. In 2015, Gland had a revenue of about US$183 million with net profit of US$4.1 mn that year.

Now, Fosun Pharma, which is driven by Chinese billionaire Guo Guangchang, will be claiming 74 percent stage in Gland Pharma Ltd. for a chunk of US$1.1 billion. The Chinese company will be getting an access to Gland’s prospering field of generic injectable medicines as well as the control on facilities that caters to the U.S. and other developed country-wide markets.

Investors Showing Keen Interest and Actively Negotiating Hurdles

These recent news have propelled Fosun Pharma’s shares by 4.3 percent in Shanghai on Monday, with the shares of the largest shareholder, Fosun International Ltd., climbed 9.7 percent, a new peak since August 2015. Gland Pharma Ltd. was founded in Hyderabad in India in 1978, and specializes in drugs for oncology and cardiology treatments as well as injectable drugs such as antibiotics. Gland’s manufacturing establishments has a number of regulatory compliance certificates such as the U.S. FDA.

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