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Fosun completes revised deal for 74% stake in Gland Pharma

03 October, 2017

China’s Shanghai Fosun Pharmaceuticals Group Co. Ltd said on Tuesday it has completed a revised deal to acquire a 74% stake in Hyderabad-based drugmaker Gland Pharma Ltd.

Fosun Pharma said in a stock-exchange filing that the company and its controlling shareholder Fosun International Ltd has completed all formalities related to the acquisition.

The completion of the deal comes more than a year after Fosun agreed, in July last year, to buy a majority stake in Gland Pharma from the company’s founders and private equity investor KKR.

KKR had invested $200 million to pick up a stake of around 38% in Gland Pharma in 2014, according to VCCEdge, the data research platform of VCCircle. The deal was announced in November 2013 and was closed in August 2014.

Fosun was initially looking to buy as much as a 96% stake in Gland Pharma. However, in the deal announced in July 2016 it had trimmed the stake to 86% without specifying any reason.

The deal subsequently ran into regulatory hurdles. The Indian government’s Cabinet Committee of Economic Affairs was reluctant to approve Fosun’s plan to acquire 86% of Gland Pharma in light of a border stand-off between India and China, as VCCircle first reported on July 22.

On 18 September, Fosun said it had agreed to acquire a 74% stake in Gland Pharma for $1.09 billion (Rs 6,980 crore)

The acquisition of a 74% stake does not require CCEA approval; in July 2016, the Indian government had said that foreign direct investment of up to 74% in existing pharmaceuticals companies would fall under the automatic route.

Fosun also said previously that the revised deal value includes a contingent consideration of not more than $25 million in relation to the launch of Enoxaparin in the US by Gland Pharma.

Besides, the founders of Gland Pharma have the right to exercise a put option within a year of the agreement closure to sell an additional stake to Fosun for $355 million, the Chinese company said in September.

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Fosun completes revised deal for 74% stake in Gland Pharma

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