China-based Fosun Pharmaceuticals Ltd. is all set to acquire Hyderabad-based Gland Pharma for $1.3 billion having 96% of its stakes in the firm. The shares holding is backed by global private equity enterprise KKR & Co. The respective company deals in manufacturing of generic injectables, approved by US and UK drug regulators. The products are send in US market as well as few places in India.
Fosun Pharmaceuticals Ltd. headquartered in China has put forward a non-binding proposal to existing shareholders. Also, a Chinese company showing interest and acquiring an Indian company comes as a rare instance not regularly witnessed in the financial marketof M&A. (Mergers&Acquisition). Although, enterprises hailing from China has always been looked in a suspicionmanner when it comes to keeping termswith India.
A few years back in 2013, KKR spend almost $200 million in its pharma segment raising fund from Evolvence India Life Science Fund. It further invested approximately $600 million in Alliance Tire Group, based in Netherland on the very same year.
In this acquisition apart from Fosun Pharmaceuticals, other firms like Baxter International Inc., Advent International, Torrent Pharmaceutical Ltd, and so on were present, thus showing equal interest. As of now, the global market for injectables stands at $300 billion as recorded in 2014 out which India possesses mere $2 billion of the total whereas the US accounts for 35% of the total share.
According to Grant Thorton, Advisory, Annual Deal Tracker, “The pharma, healthcare and biotech sector has seen high levels of activity in the M&A space during 2015. The transaction volumes have been the highest in the last five years. In 2015, 65 M&A transactions valued at $4.04 billion were executed as against 64 transactions valued at $5.7 billion in 2014.”
In an annual basis, more than 5 to 7 firms are acquired in India from the pharmaceutical industry. Till nowseven companies have successfully attractedforeign investors towards their company. US-based Mylan acquired women’s healthcareFamy Care Ltd. Sweden-based Recipharm AB purchased Nitin Lifesciences Ltd. for 100 million USD. Mylan Inc. also acquired Bengaluru-based Stride Arcolab Ltd. majorly purchasing its product named Agila Specialities for 1.75 billion USD.