MONEY
In what would be the first instance of large FDI from China in Indian manufacturing, Shanghai Fosun Pharmaceutical (Group) Co will sign a definitive agreement later on Wednesday to acquire a controlling stake in Hyderabad-based Gland Pharma in a $1.4 billion transaction said a report in The Economic Times. This would pave the way for the Chinese firm to expand its research and manufacturing capacity in India.
Fosun has agreed to acquire 96 percent stake, which includes shares held by founders of Gland Pharma Ravi Penmetsa and family and private equity giant, KKR & Co LP. However another source said Gland will initially buy 86% of the company while Penmetsa may retain a 10% stake.
The deal may need FIPB approval. "We will be signing the deal later today at Hong Kong and an official announcement will be made to the Chinese exchanges later," said a source, with direct knowledge of the matter. When contacted, KKR and Gland Pharma promoters declined to comment. Fosun was not immediately reachable for a comment.
The Economic Times had reported on June 6 that Fosun has emerged as the front runner in a closely fought auction process, which saw US giant Baxter and private equity fund Advent make firm offers early May.
The transaction will be the first billion dollar takeover of an Indian company by a Chinese one, with the few big deals confined to tech and e-commerce. The deal will have to get regulatory approvals from Indian authorities. As this will be a controlling acquisition by a Chinese player, the deal will undergo strict regulatory scrutiny..