Shnaghai Fosun to buy large stake in Gland Pharma for $1.4 billion
- The Chinese biophamaceutical firm, Shanghai Fosun, has agreed to acquire and 86% stake in Gland Pharma, which is backed by KKR based in India, for $1.4 billion.
- This represents the first billion-dollar-plus purchase of an Indian manufacturing outfit by a Chinese firm, the Economic Times reports. Shanghai Fosun seeks to gain Gland Pharma's technical capabilities, which specialize on injectables, through the acquisition.
- The deal was first negotiated in May, and comes on the heels of a new policy in India that allows foreign investments of up to 74% in manufacturing enterprises.
The Indian pharmaceutical market, which generated $30 billion last year, is growing at roughly a 17% CAGR. By 2020, that market is expected to generate $55 billion in revenues, making it the sixth largest pharma market in the world, according an India Brand Equity Foundation report.
Gland Pharma specializes in hospital products and manufactures IV drugs, along with pre-filled vials and syringes for injectable drugs–making Gland an attractive complementary acquisition. It then turns around and sells those products to large companies, such as Dr. Reddy's and Mylan.
For Shanghai Fosun, the Gland Pharma purchase is another opportunity to grow its presence, this time in the Indian market, and feed its appetite for scaling and building out via acquisitions. It also allows Shanghai Fosun to grow its presence in the injectables market, which is becoming increasingly lucrative.
The Economic Times reports the acquisition of Gland was competitive, however, the only two companies in the running by early May were Baxter and Shanghai Fosun. And though most bets were on Baxter, Shanghai Fosun has sealed the deal.