The Foreign Investment and Promotion Board (FIPB) of India has deferred the Gland Pharma-Shanghai Fosun deal worth $1.4 billion.
China’s Shanghai Fosun planned to acquire 86 per cent stake in India’s Gland Pharmaceuticals last year in July. Gland Pharma is a Hyderabad-based pharmaceutical company that specialises in injectables. The deal would boost Gland Pharmacueticals’ presence in Africa, Europe and Japan.
This was the first deal in the pharmaceutical sector that was signed after the Centre eased FDI norms in May last year. The government had allowed inflow of up to 74 per cent FDI in pharmaceutical companies through the automatic route.
Fosun had worked out a clear-cut strategy to use the expertise acquired via Gland Pharmaceuticals. The homegrown drug maker develops niche injectable drugs and supplies them to large companies such as Dr Reddy’s and Mylan Laboratories.
In the US alone Gland supplies 65 products and around 150 in other emerging markets. The Chinese drug maker planned to leverage the capabilities to expand its product offerings as it will gain access to seven manufacturing sites – three based in Vizag and four in Hyderabad.