HONG KONG/MUMBAI: Shanghai Fosun Pharmaceutical Group has agreed to buy an 86% stake in Gland Pharma-backed US-private equity firm KKR for up to $1.3 billion, India’s largest inbound acquisition this year.
The deal, announced by the Chinese company on Thursday, is the first major move by the Fosun group since Guo Guangchang, founder of flagship holding firm Fosun International and one of China’ s best-known entrepreneurs, briefly went missing late last year.
The acquisition, which is subject to regulatory approvals, would also under score a positive outlook for drug makers in India, which is a major global supplier and counts the United States as its largest export market, helped by lower manufacturing and labour costs.
Gland Pharma, based in the southern city of Hyderabad, owns four factories from where it supplies a variety of injectables —widely used medicines administered through vials, syringes, bags and pumps, which are harder to make than regular medicines.
Moody’s Indian associate ICRA expects patents to expire on about $16 billion (almost ₹1.1 lakh crore) worth of injectables in the United States over four years through 2019, offering a growth opportunity for Indian suppliers. ICRA estimates the US injectables market to grow at about 10% annually over five years.
{{/usCountry}}Moody’s Indian associate ICRA expects patents to expire on about $16 billion (almost ₹1.1 lakh crore) worth of injectables in the United States over four years through 2019, offering a growth opportunity for Indian suppliers. ICRA estimates the US injectables market to grow at about 10% annually over five years.
{{/usCountry}}Gland Pharma’s founder sand KKR jointly hold roughly 96% of the drugmaker.
As per the terms of the agreement, Gland pharma’s vice chairman and MD Ravi Penmetsa will continue to lead the company after the acquisition.
Founded in 1978, Gland Pharma manufactures a wide range of injectables, including vials, ampoules, pre-filled syringes, lyophilized vials and ophthalmic solutions. It has presence in about 90 countries across five continents.
Besides Fosun, the Gland Pharma sale attracted interest from private equity firm Advent, medical company Baxter International Inc and drug maker Torrent Pharmaceuticals, people close to the matter told Reuters .
Fosun group is also looking for opportunities in Britain and Europe, in markets rendered increasingly volatile by Britons’ vote to leave the European Union, billionaire Guo said at an event last month.