China's Fosun acquires India's Gland Pharma for $1.26 billion in record-breaking takeover

[TaiShang]

Fosun acquires India's Gland Pharma for $1.26 billion in record-breaking takeover
By Ma Danning (People's Daily Online) 16:30, July 29, 2016

A unit of China’s Fosun Group has agreed to acquire a controlling stake of Gland Pharma Limited, a leading Indian pharmaceutical products company, for up to $1.26 billion, the Chinese company said in statement on its website on July 28.

The deal is China’s largest takeover of a company in India, as well as the largest takeover abroad by a Chinese pharmaceutical company.

Shanghai Fosun Pharmaceutical (Group) Co. Ltd. is buying a roughly 86 percent stake in Gland Pharma, including all shares owned by KKR as well as shares from other shareholders, said the statement.

“The deal will significantly bolster Fosun’s capability in technology used for injectable formulations, and strengthen the firm’s global presence,” said Chen Qiyu, chairman of Fosun Pharma.

Gland Pharma, based in the southern city of Hyderabad, owns four factories from which it supplies a variety of generic injectables, including Heparin, which prevents blood clots following surgery.

This deal is just the latest overseas acquisition by a Chinese pharmaceutical company.

On July 25, China’s Luye Pharma announced that it will pay $269 million to acquire the transdermal patch and implant business of Swiss pharma company Acino, a specialist in novel drug delivery systems.

On July 21, China-based drug manufacturer Jilin Zixin Pharmaceutical Co. Ltd. agreed to invest up to $42 million in Nabsys 2.0, a high-definition whole genome-mapping company in the U.S., by acquiring a 67 percent share.

 

[JohnyD]

For decades China has kind of closed its pharma market to Indian generic giants.....Seems China has finally realized there is no option to India when it comes to high quality, affordable Medicines..Both India and China have billions of people with common problem like affordability of medicines to large population..A partnership is must in this area!

 

[empirefighter]

For decades China has kind of closed its pharma market to Indian generic giants.....Seems China has finally realized there is no option to India when it comes to high quality, affordable Medicines..Both India and China have billions of people with common problem like affordability of medicines to large population..

Both China and India chemical industry including pharma are far behind the Europe and USA，we have to spend much money to import the expensive medicine from Europe and USA，wish the collaboration between India and China pharma companies can bring cheaper medicine for developing countries.

 

[Three_Kingdoms]

One key factor making the purchase of an India drug maker attractive is the Indian government ignores overseas claim of patent rights, so patented drugs in the west are produced as cheap generic drugs in large quantities through local pharmaceutical companies in india
The other factor is india is the place where you can find a lot of "price-friendly" natural plants and minerals which are important ingredients for making drugs

 

[TaiShang]

Fosun eyes 30% stake in Portugal's bank
By Guo Yiming
China.org.cn, August 2, 2016

The logo of Chinese conglomerate Fosun is seen on top of a building. [Photo provided to China.org.cn]

China's biggest private conglomerate Fosun has made an offer for a 16.7 percent stake in BCP, Portugal's largest listed bank, via a dedicated capital hike with a possible further increase of the stake up to 30 percent, the bank said.

With BCP's current market capitalization of 1.18 billion euros (US$1.32 billion), the proposed initial deal would be worth around 200 million euros.

According to its recent earnings release, the bank suffered a total loss of 197.3 million euros in H1 2016, compared to total earnings of 240.7 million euros during the same period last year.

Its stock has shed over 60 percent of its value so far this year. In a large part, this was due to concerns about its capital needs.

However, the latest stress test conducted last Friday by the European Central bank revealed that the Portuguese bank has sufficient capital to fend off financial crisis.

The proposed deal will not be finished until it gets the green light from related banking authorities in both the Portuguese and European Union.

The Chinese conglomerate has been particularly active in overseas buying deals in recent years.

Fosun agreed to spend up to US$ 1.26 billion for a roughly 86 percent stake in the Indian pharmaceutical company Gland Pharma Ltd. in late July.

Earlier, it also acquired French travel group Club Med and Portugese leading insurer, Fidelidade.

 

[Shotgunner51]

Fosun acquires India's Gland Pharma for $1.26 billion in record-breaking takeover
By Ma Danning (People's Daily Online) 16:30, July 29, 2016

A unit of China’s Fosun Group has agreed to acquire a controlling stake of Gland Pharma Limited, a leading Indian pharmaceutical products company, for up to $1.26 billion, the Chinese company said in statement on its website on July 28.

The deal is China’s largest takeover of a company in India, as well as the largest takeover abroad by a Chinese pharmaceutical company.

Shanghai Fosun Pharmaceutical (Group) Co. Ltd. is buying a roughly 86 percent stake in Gland Pharma, including all shares owned by KKR as well as shares from other shareholders, said the statement.

“The deal will significantly bolster Fosun’s capability in technology used for injectable formulations, and strengthen the firm’s global presence,” said Chen Qiyu, chairman of Fosun Pharma.

Gland Pharma, based in the southern city of Hyderabad, owns four factories from which it supplies a variety of generic injectables, including Heparin, which prevents blood clots following surgery.

This deal is just the latest overseas acquisition by a Chinese pharmaceutical company.

On July 25, China’s Luye Pharma announced that it will pay $269 million to acquire the transdermal patch and implant business of Swiss pharma company Acino, a specialist in novel drug delivery systems.

On July 21, China-based drug manufacturer Jilin Zixin Pharmaceutical Co. Ltd. agreed to invest up to $42 million in Nabsys 2.0, a high-definition whole genome-mapping company in the U.S., by acquiring a 67 percent share.

An interesting M&A news: pharmaceutical, India, these two keywords make it significantly different from other FOSUN deals which tend to be services (financial, leisure), located in Europe/Russia. Anyway congrats!

 

[Kyle Sun]

I am wondering whether india gov will allow this deal.

 

[Shotgunner51]

I am wondering whether india gov will allow this deal.

It's an inbound FDI, the government should welcome it. Also Gland Pharma is a privately owned entity, I suppose such deal is far less sensitive than if it's a public company or state-owned enterprise.

Despite India is not an industrialised country nor a traditional R&D powerhouse, its pharmaceutics sector is very well developed owing to an uniquely designed legal structure (see below). It's definitely one interesting sector worth looking into from a Chinese perspective since on one hand Chinese firms are seeking outbound investment opportunities, and more importantly the under-performing China home market may need fundamental overhaul, Indian experience could be good references.

"PATENT PROTECTION AND INDIAN PHARMACEUTICAL INDUSTRY"
http://www.globalresearchonline.net/journalcontents/Volume3issue2/Article 008.pdf​