The largest overseas M&A by a Chinese pharmaceutical company! Fosun Pharma acquires Gland Pharma, an Indian pharmaceutical company

The largest overseas M&A by a Chinese pharmaceutical company!

       Fosun Pharma intends to spend more than US$1.2 billion to acquire GlandPharma, a leading injectable pharmaceutical company in India, to accelerate the process of internationalization.

       On July 28, 2016, Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (abbreviated as “Fosun Pharmaceutical”, stock code: 600196.SH, 02196.HK) Announcement According to the report, it intends to acquire approximately 86.08% of Gland Pharma Limited (referred to as "Gland Pharma") through its controlling subsidiary with a capital contribution of no more than US$1,261.37 million (hereinafter referred to as "this transaction"), including that the acquirer will rely on Gland’s The contingent consideration paid for enoxaparin products on the market in the United States does not exceed US$50 million. This is the largest overseas M&A case of a Chinese pharmaceutical company so far.

       After the completion of this transaction, the headquarters of Gland Pharma will continue to be established in the Indian city of Hyderabad. The current CEO and COO of Gland Pharma will continue to serve, and the CEO and his father (founder of the company) will remain on the board of directors.

An important milestone in the internationalization of Fosun Pharma

       Chen Qiyu, Chairman of Fosun Pharma, said: “Gland Pharma has an excellent management team. With the strong support of KKR, the business has developed rapidly and has grown into an international influence. India’s leading company in injections. The acquisition of GlandPharma will become an important milestone in the international development of Fosun Pharma's pharmaceutical industry and accelerate Fosun Pharma's internationalization process. China and India are highly complementary in the pharmaceutical field. The resource grafting of Chinese and Indian pharmaceutical companies represented by Fosun Pharma and Gland Pharma will help promote the internationalization of Chinese pharmaceutical companies in R&D innovation and generic drug export. ”

India’s first injection pharmaceutical company approved by the US FDA

Gland Pharma was established in 1978 and is headquartered in Hyderabad, India. It is mainly engaged in the manufacturing of injectable drugs. Gland Pharma is India's first injectable drug manufacturer approved by the US FDA, and has obtained GMP certification in major regulatory markets around the world. Its business income mainly comes from the United States and Europe. Gland Pharma currently provides manufacturing services for injection generic drugs to major pharmaceutical companies around the world through joint development and introduction of licenses. As one of the few companies specializing in the production of injectable drugs, Gland Pharma is in a leading position among similar companies in the Indian market.

Explore the global market for biomedicine

After the completion of this transaction, it will help promote the industrial upgrading of Fosun Pharma's pharmaceutical manufacturing business, accelerate the process of internationalization, and increase its market share in injections. At the same time, Fosun Pharma will take advantage of Gland Pharma’s own R&D capabilities and the unique generic drug policy advantages of the Indian market to graft Fosun Pharma’s existing biomedical innovation R&D capabilities to achieve product line integration and synergy, and actively explore India and other markets. To expand the scale of pharmaceutical manufacturing and R&D operations.

       The announcement also pointed out related risks. This transaction must also be approved by Fosun Pharma’s general meeting of shareholders, Gland Pharma’s general meeting of shareholders, overseas investment approval by relevant authorities in China, and other national authorities (including but not limited to India’s anti-monopoly, Indian foreign investment, and U.S. anti-monopoly authorities).

China’s Fosun Pharma to Sign Agreement for over US$ 1.2Billion in Gland Pharma Acquisition 

SHANGHAI – [July 28, 2016] – Shanghai FosunPharmaceutical (Group) Co. Ltd. (together with its subsidiaries, “FosunPharma”), a leading Chinese healthcare provider (stock code: 600196.SH,02196. HK), today announced the signing of a definitive agreement under which Fosun Pharma will acquire an approximate [86.08%] stake in Gland Pharma for nomore than [US$ 1261.37 million], including paying no more than [US$ 50 million]contingent consideration for Gland’s Enoxaparin sales in the US market. Thisis, so far, the largest overseas acquisition of a Chinese pharmaceuticalcompany.  

Following the close of the transaction, Gland Pharma willremain headquartered in Hyderabad. PVN Raju, Founder of Gland Pharma, andhis son, Dr. Ravi Penmetsa, will continue to be on the Board, and Dr. Penmetsawill continue to serve as Managing Director and CEO. The family will retain astake in Gland Pharma.

Mr. Chen Qiyu, chairman of Fosun Pharma said, “GlandPharma’s management team, along with the support from KKR, has done atremendous job of growing the business to become the global leader in GenericsInjectables Industry. The deal will greatly strengthen Fosun Pharma’s global presenceand accelerate our speed of internationalization. It will enable us to providemore high quality products and services to our patients worldwide. Fosun Pharmais dedicated to implementing our investment model of ‘Combining China’s GrowthMomentum with Global Resources’ with the win-win cooperation with Gland Pharma.”

Established in 1978 and based in Hyderabad, Gland Pharmadevelops and manufactures generic injectables for use in nearly 90 countries onfive continents, with a focus on the Indian and US markets. In 2003, GlandPharma became the first company in India to get US Food and Drug Administration(“FDA”) approval for pharmaceutical liquid injectable products. Gland Pharma’sworld-class manufacturing facilities have also received approvals from a numberof key medical regulatory agencies around the globe including those inAustralia, Germany, and the UK, as well as the World Health Organization(“WHO”).

The transaction will promote Fosun Pharma’s developmentby upgrading pharmaceutical manufacturing, speeding up internationalizationprogress and increasing market share in injectables field. The twopharmaceutical manufacturers are expected to integrate production lines and synergize innovation in developing biopharmaceutical products. Fosun Pharmawould also be able to further explore the international market by leveragingGland Pharma’s research capability and India’s