The Central Government of India has stalled a $1.3-billion bid by Shanghai Fosun Pharmaceutical Group (SFP) to acquire an 86% stake in Hyderabad-based Gland Pharma. “Genuine concerns” over proprietary technology developed by the Indian company going over to a Chinese pharma major mentioned.
Top government officials on Monday dismissed media reports that the decision was linked to the current border stand-off between the two countries.
Sources say Gland Pharma has a lead in injectibles, an area where Chinese firms lag Indian pharma companies. Gland Pharma says it has pioneered Heparin technology in India, and is a world leader in the Glycosaminoglycans range of molecules.
Last year, Chinese billionaire Guo Guangchang, who runs a diversified conglomerate under the banner of Fosun International, struck the billion-plus-dollar deal to buy Gland Pharma following the government’s decision to allow 74% foreign investment in pharma manufacturing through the automatic route.
After clearing The Foreign Investment Facilitation Portal (FIFP), the proposed acquisition needed the nod of the Cabinet Committee on Economic Affairs.
Besides being the largest Chinese acquisition in India, the deal would have also seen one of the wealthiest person in China investing in the Indian manufacturing story.
Gland Pharma said it had no information about the government’s decision.”We have not heard anything about it (rejection).The FIPB gave its clearance in March. Thereafter we have been following up, but we do not know anything further than that. We did not expect any hurdles,” said a Gland Pharma executive.