Several buyout firms including Advent International, Baring Private Equity Asia, Bain Capital, Blackstone, Carlyle and KKR have been approached to buy Fosun-owned Gland Pharma. If the deal goes forward, it will be India’s biggest pharma deal, a report by the Economic Times (ET) said. Currently, Fosun owns a 57.86 per cent stake in the Indian generic injectable maker Gland Pharma.
Fosun acquired Gland Pharma in 2017 for $1.1 billion. It was listed in 2020 in a Rs 6,480 crore IPO. Fosun has appointed Morgan Stanley to find the buyer for the firm.
In the discussions, the significant control premium sought by Fosun is being considered as the roadblock, the ET report added.
Fosun is heavily debt-laden and has been struggling due to the impact of the slowdown of the property sector in China. The Chinese banks have been asked to check their exposure to the company.
“Gland is a B2B player so there will be a huge conflict of interest for Indian companies like Sun, and Cipla to buy since Gland is supplying to their competitors. It is largely a PE play or some of the European CDMO players like Carlyle-backed Curia, Recipharm, and Siegfried Holding may look into it. They are also larger in size and are also B2B peers,” an analyst told ET.
With the acquisition, Gland pharma may also get access to global companies like AstraZeneca, Sanofi, Mylan, and Organon. It also announced in November its plans to buy French pharma firm Cenexi for 120 million euros.
“We can imagine Gland tapping into the same customers to expand the share of wallet from just US to the EU as well. Cenexi has 3 plants operating at 30-35 per cent utilization and this capacity can be leveraged relatively quickly to address the EU opportunity. Its business also seems to be a resilient one where the end market dynamics are healthy. Italy, Spain, France, EE markets like Romania, Poland etc are branded generic markets seeing mid-to-high single-digit growth and stable pricing and margins, unlike the US generics market. Cenexi is the sole supplier for 70 per cent of the products which increases switching costs for the customer,” Nithya Balasubramanian, an analyst with Bernstein Research told ET.