Researchers work in a medical lab of Novartis in Shanghai. (Photo : Getty Images)
Shanghai Fosun Pharmaceutical (Group) Co. Ltd., a unit of China's Fosun Group, has agreed to pay $1.26 billion to get about 86 percent stake in Indian pharmaceutical company Gland Pharma Ltd. from shareholders that included KKR & Co., among others.
The Wall Street Journal reported that the deal is China's largest takeover of an Indian company and Fosun's first in the country. Last year, Alibaba became the largest deal maker in India when it invested $1 billion into Indian payment firm Paytm and online retailer Snapdeal.com.
The global generic drug market is dominated by India's pharmaceutical industry. Gland Pharma's generic injectables such as Heparin are marketed in the U.S.
To ease policies on foreign investment and liberalize the economy, India has allowed foreign investors to own up to 74 percent in Indian pharmaceutical companies even without government approval, according to an announcement last month.
In March, Fosun chairman Guo Guanchang said that the company decided to look for deals in developing markets such as India as asset prices rise in U.S. and Europe.
The deal with Gland Pharma will boost the company's global presence as well as speed up its internationalization, Chen Qiyu, chairman of Fosun Pharma, said.
"Fosun Pharma is dedicated to implementing our investment model of 'Combining China's Growth Momentum with Global Resources' with the win-win cooperation with Gland," Chen said.
Based in Hyderabad, Gland Pharma was established in 1978 and was the first company to introduce the use prefilled, single syringes in India. The company operates in about 90 countries. In 2003, it became the first Indian company to get approval from the U.S. Food and Drug Administration for its pharmaceutical liquid injectable products.
In November 2013, KKR & Co. acquired a 38 percent stake in Gland shares for nearly $200 million, citing the company's financial strength and performance.
Meanwhile, Fosun is investing globally in property, insurance and entertainment, and its portfolio includes a stake in Canadian circus troupe Cirque du Soleil, French resorts operator Club Méditerranée SA, and an investment in the prime property in lower Manhattan, the One Chase Manhattan Plaza.
