Fosun scales down its Gland Pharma deal to circumvent government review – China’s latest business and technology news
Shanghai Fosun Pharmaceutical Group announced that it would trim down the size of its purchase of India’s drugmaker Gland Pharma, in a bid to avoid a government review that is required for any buyouts of more than 75 percent of certain types of Indian companies, Bloomberg reports.
Fosun Pharma is now buying a 74 percent stake for $1.1 billion, according to a statement released on September 17. The tweak of the deal didn’t come as a surprise, as the original one from last year — which sought to buy an 86 percent stake valued at about $1.26 billion — was halted earlier this year by the Cabinet Committee on Economic Affairs of India due to its concerns about the country losing its edge in some areas of the pharmaceutical industry. The initially proposed deal would have become the biggest Chinese acquisition in India if it hadn’t met with regulatory hurdles.
Backed by Chinese billionaire Guo Guangchang 郭广昌, Fosun Group has been increasingly aggressive in making costly deals both overseas and at home. Caixin reported that last week, a group of Chinese private companies led by Fosun Group signed a deal to construct China’s first privately controlled railway line. However, despite its ambitious expansion, Fosun Group is substantially burdened by its growing debt pile, which recently forced it to sell the initial public offering (IPO) shares of its Israeli laser-making unit in Hong Kong.
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