Largest possible Chinese investment in India stalled by government
What's the story
Amid the India-China standoff at Doklam, a central panel has stalled a bid by a Chinese pharma group for majority stake in a Hyderabad-based brand. The FIPB had cleared the $1.3bn bid by Shanghai Fosun Pharmaceutical Group (SFP) for 86% stake in Gland Pharma, but it now needs clearance from the CCEA. Apparently there were "genuine concerns" over proprietary technology developed by Gland Pharma.
Details
India nod to pharma FDI opened doors for Chinese billionaire
According to reports, Gland Pharma leads in injectibles, an area where Chinese firms lag behind Indian ones. The company claims to be a global leader in Glycosaminoglycans range of molecules. After India opened doors for 74% FDI in pharma through the automatic route, Chinese billionaire Guo Guangchang made a billion-dollar deal for Gland Pharma. It was potentially the largest Chinese acquisition in India.
Gland Pharma
Setback comes as a surprise for Gland Pharma
Currently, Gland Pharma promoter Ravi Penmetsa's family along with KKR, a US private equity firm, own over 95% stake in the company. When they announced a sale, several parties including US-based Baxter and buyout investor Advent International expressed interest. But according to Gland Pharma, "We have not heard anything about (a rejection from the government)." "We didn't expect any hurdles," a senior executive said.