In the largest acquisition of an Indian company by a Chinese firm, Shanghai Fosun Pharmaceutical Group Co on Thursday (July 28) agreed to buy Hyderabad-based drugmaker Gland Pharma Ltd for about USD 1.26 billion (nearly Rs 85 billion).
Fosun Pharma will acquire 86 per cent of Gland Pharma for USD 1.26 billion, the KKR-backed Indian firm said in a statement adding that a definitive agreement has been signed for the deal.
Gland Pharma's founders and US private equity firm KKR, who jointly hold around 96 per cent of the drugmaker, will sell most of their stake to Fosun.
"Based on the agreement, Fosun Pharma will purchase all shares of Gland owned by KKR Floorline Investments Pte Ltd in addition to shares purchased from other shareholders of the company," it said.
Gland founder P V N Raju and his son Dr Ravi Penmetsa will continue to be on the Board, and Dr Penmetsa will continue as the Managing Director and CEO. The family will retain a stake in Gland.
Established in 1978, Gland develops and manufactures generic injectables for use in nearly 90 countries on five continents, with a focus on the Indian and US markets. It owns four factories.
Injectables are widely used medicines administered through vials, syringes, bags and pumps and are harder to make than regular medicines. KKR, which invested in Gland in 2014, is exiting the firm completely.
While privately held Gland Pharma's line up of therapies includes antibiotics, oncology and cardiology treatments; Shanghai-based Fosun Pharma's product lines range widely from cardiovascular drugs and cancer treatments to diagnosis equipment and scalpels.
"We looked at many partners with the help of KKR and as we went through this process we felt Fosun suits us the best because they are a conglomerate, they have a lot of resources, they are worldwide and they also have Fosun Pharmaceutical which is a multinational. They have a presence in Israel, they have R&D in the US," Penmetsa said.
The Chinese firm has several R&D centres and manufacturing in China and they are also strong in active pharmaceutical ingredient (API), he added. "So, we felt that this will really compliment what we already created."
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