Fosun takes Gland Pharma bid to $1.1 billion

Bloomberg

Shanghai Fosun Pharmaceutical Group Co. scaled back its proposed purchase of control in Indian drugmaker Gland Pharma Ltd. to a level that would allow it to avoid a government review of the biggest Chinese acquisition in India.
Fosun Pharma, backed by Chinese billionaire Guo Guangchang, will now buy a 74 percent stake for $1.1 billion, according to a statement. It had originally sought to buy an 86 percent stake in the closely-held Indian drugmaker from an investor group including KKR & Co. However, a stake that size must be signed off by the Cabinet Committee on Economic Affairs, which was poised to reject the move.
The reduced stake will avoid a government review, Fosun said, and the transaction is set to complete by October 3 as all the main conditions have been met. The deal gives the Chinese firm access to Gland’s stable of generic injectable medicines and control of facilities to export to the US and other developed markets.
The original acquisition offer valued Gland, including debt, at about $1.35 billion, 16 times its earnings for the financial year 2016, Fosun Pharma said in a statement August last year to the Hong Kong stock exchange. Gland had revenue of $183 million and profit of 272 million yuan in 2015, according to the statement.
Spokesmen for India’s ministry of commerce and industry, and Gland Pharma didn’t immediately respond to calls seeking comment. Fosun Pharma shares rose 0.6 percent in Shanghai.
Shares of Fosun International Ltd., Fosun Pharma’s largest shareholder, jumped 12 percent to HK$16.76 in Hong Kong.
The deal faced Indian regulator scrutiny as tensions between
Indian and China have escalated amid a renewed spat over territory in the Himalayas since 1962.