Fosun Pharma acquires 74% stake in Gland Pharma for $1.09 bn

Chinese drug firm Fosun Pharma has acquired approximately 74 per cent in Hyderabad-based Gland Pharma at a valuation of not more than $1.09 billion, the company has said.

Since all the conditions precedent of the acquisition of the controlling interest in Gland Pharma have been satisfied boards of directors of Fosun Pharma and Fosun International are pleased to announce that the completion of the acquisition of the controlling interest in Gland Pharma, the companies said in a joint statement.

In the regulatory filing, Fosun Pharma and Fosun International said following the completion of the acquisition, Gland Pharma has become an indirect non-wholly owned subsidiary of Fosun Pharma and Fosun International.

Fosun Pharma and Fosun International indirectly hold approximately 74 per cent equity interest in Gland Pharma, the joint statement added.

Shanghai Fosun Pharmaceutical (Group) Co Ltd had earlier in July last year announced plans to acquire 86.08 per cent stake in Gland Pharma for not more than $1.26 billion.

However, the Cabinet Committee on Economic Affairs (CCEA) had raised objections to the proposal earlier this year, a development that came amid heightened tensions between India and China over border dispute.

The Chinese firm on September 17 this year had decided to scale down its proposed acquisition in Gland Pharma to 74 per cent stake at a valuation of not more than $1.09 billion.

It had said that the "approvals of the relevant PRC authorities in respect of the acquisition have been obtained, and the United States anti-trust filings and Indian anti-trust filings have been completed."

"...no review and approval of the India Foreign Investment Promotion Board and the Cabinet Committee on Economic Affairs of India is required in relation to the transactions contemplated under the amendments to the transaction documents under the relevant Indian foreign investment policies," Fosun Pharma said at that time.

With an increase in the shareholding from the earlier contemplated sale, promoters Ravi Penmetsa and his father P V N Raju will continue on the board of the company Gland Pharma had earlier said in a statement.

Besides, the present management team will be in-charge of the day to day running of the company, it had added.