China’s Fosun bids for KKR-backed Gland Pharma
Gland Pharma

Shanghai Fosun Pharmaceutical (Group) Co Ltd said on Monday it has made a non-binding offer to acquire Gland Pharma Ltd, an Indian drugmaker part-owned by private equity giant KKR & Co.

The Chinese company said in a statement it made the proposal through wholly owned unit Fosun Industrial Co Ltd to acquire 96% of Gland Pharma from existing shareholders. It didn’t give any details of the proposal.

Fosun said that if its bid succeeds, it will enhance its drug manufacturing, research and development capacity.

Gland Pharma, which was founded by PVN Raju in 1978, develops and makes generic injectables primarily for the US market as well as for India and some semi-regulated markets. In 2003, Gland Pharma was the first company in India to get US Food and Drug Administration approval for pharmaceutical liquid injectable products.

KKR picked up a minority stake in Gland Pharma for about $200 million in 2013. That deal gave an exit to Evolvence India Life Sciences Fund, which had invested $30 million in Gland Pharma in 2008.

Fosun’s statement comes amid media reports that global buyout firm Advent International and US-based Baxter International are also bidding to buy Gland Pharma. The deal value is expected to be in the range of $1.1-1.2 billion, according to the media reports.

An email sent to Gland Pharma seeking comments on the Fosun announcement did not elicit any response.

Gland Pharma’s net sales rose to Rs 993.8 crore in the financial year ended on March 31, 2015, from Rs 990.9 crore the year before, according to VCCEdge, the data research platform of VCCircle. Its net profit dropped to Rs 209.2 crore in 2014-15 from Rs 223.8 crore the previous year.

Emails sent to Gland Pharma earlier seeking comments on its net profit drop and 2015-16 numbers did not elicit any response.

The Indian injectables market has seen some major acquisitions in the past. In 2009, Chennai-based Orchid Chemicals sold its injectables business to Hospira (now part of Pfizer) for $400 million. In 2013, Mylan acquired Agila, the specialty injectables arm of Strides Arcolab, for $1.6 billion.

Fosun Group was founded in 1992 and has operations in the pharmaceuticals, property development, steel, mining, retail and financial services sectors. It has been looking to invest in India. In June 2013, VCCircle reported that the conglomerate was looking at making private equity investments into Indian companies. The company had plans to invest at least $30 million in growth companies in India.

Fosun Group is one of the biggest private-sector conglomerates in China. Late last year, it was in the news when its billionaire chairman Guo Guangchang briefly went missing amid reports that he was detained by police on corruption allegations. He resumed work a couple of days later.

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