FIPB defers Gland Pharma's acquisition by Chinese Firm

Clears 9 deals, including those of Vodafone and Netmagic, totaling foreign investment of Rs 659 cr

The Foreign Investment and Promotion Board (FIPB) has deferred the Gland Pharma-Shanghai Fosun deal worth $1.4 billion.

It approved nine investment proposals, including those of Netmagic Solutions and Vodafone, totaling a foreign investment of Rs 659 crore. The inter-ministerial body, to be wound up soon, recommended to the Cabinet Committee on Economic Affairs (CCEA) a proposal by Apollo Hospitals to raise fresh equity shares for Rs 750 crore through foreign investment.

China's Shanghai Fosun planned to acquire 86 per cent stake in India's Gland Pharmaceuticals last year in July. Gland Pharma is a Hyderabad-based pharmaceutical company that specialises in injectables. The deal would boost Gland Pharmacueticals' presence in Africa, Europe and Japan.

This was the first deal in the pharmaceutical sector that was signed after the Centre eased FDI norms in May last year. The government had allowed inflow of up to 74 per cent FDI in pharmaceutical companies through the automatic route.

Fosun had worked out a clear-cut strategy to use the expertise acquired via Gland Pharmaceuticals. The homegrown drug maker develops niche injectable drugs and supplies them to large companies such as Dr Reddy's and Mylan Laboratories.

In the US alone Gland supplies 65 products and around 150 in other emerging markets. The Chinese drug maker planned to leverage the capabilities to expand its product offerings as it will gain access to seven manufacturing sites - three based in Vizag and four in Hyderabad.

FIPB cleared proposals of Netmagic Solutions entailing an investment of Rs 534 crore and Vodafone India Rs 55 crore.

Besides Apollo, it recommended proposals of Rs 900 crore of Star Technologies and Rs 789 crore of Flag Telecom Singapore Pte to the CCEA.