Shanghai Fosun Pharmaceutical Group Co Ltd acquires Gland Pharma for $1.4 billion

Gland Pharma’s backers include U.S. based KKR & Co LP while Shanghai Fosun Pharma has Guo Guangchang, China’s best known entrepreneur, as its founder.

According to sources with direct knowledge of the matter at hand, the Shanghai Fosun Pharmaceutical Group Co Ltd has agreed to acquire Gland Pharma for $1.4 billion. Incidentally, Gland Pharma is backed by KKR & Co LP.

The deal marks the first major move by China’s best known entrepreneur, Guo Guangchang, who founded Fosun International Ltd.

The acquisition only goes to underscore the positive outlook for drug manufacturing companies in India, which has been recognized as a major global supplier of pharmaceuticals and counts the United States as its largest export market.

Low manufacturing and labour costs in India have helped Gland Pharma boost its bottom line.

U.S. private equity firm KKR and Gland Pharma’s founders roughly hold 96% stake in the Indian company. According to the source, they will sell most of their stake to Fosun.

The deal is likely to be announced later sometime today.

Trading in the shares of Fosun International Ltd and in its Shanghai Fosun subsidiary has been suspended in Hong Kong, pending a statement regarding a “notifiable transaction”.

When asked to respond to requests for comments, KKR, and Gland Pharma were not immediately available for comment while Shanghai Fosun declined to comment.

Earlier this year in April, Gland Pharma had attracted interest from private equity firm Advent, Torrent Pharmaceuticals and from Baxter International Inc.

Gland Pharma is based in the southern India city of Hyderabad. It makes widely used medicines which are administered by syringes vials, pumps and bags and are harder to manufacture compared to regular medicines.

Categories: Entrepreneurship, HR & Organization, Regulations & Legal, Strategy


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