China drugmaker Fosun to buy smaller stake in India's Gland Pharma to avoid government veto

[HONG KONG] Shanghai Fosun Pharmaceutical Group Co will purchase a reduced 74 per cent stake for US$1.1 billion in an Indian drugmaker, allowing it to avoid a government review that may have blocked the deal, the company said on Sunday.

Fosun Pharma, backed by Chinese billionaire Guo Guangchang, had originally sought to buy an 86 per cent stake in Gland Pharma Ltd 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, Bloomberg reported on Aug 1, citing people familiar with the matter.

The reduced stake will avoid a government review, Fosun said, and the deal is set to complete by Oct 3 as all the main conditions have been met. The Chinese firm had sought Gland's stable of generic injectable medicines and facilities approved to manufacture products for sale in the US.

Chinese drugmakers have grown more ambitious in seeking deals that give them access to the US, the world's biggest pharmaceutical market. Valeant Pharmaceuticals International Inc this year sold its Dendreon Pharmaceuticals unit to Chinese conglomerate Sanpower Group Co for US$820 million. Chinese contraceptives maker Humanwell Healthcare Group Co is part of a consortium that agreed in June to buy US-based RiteDose for about US$605 million.

BLOOMBERG