Largest Chinese acquisition finally closes

Khaitan & Co acted as domestic legal counsel and Troutman Sanders as international counsel to Fosun Pharma, which on 3 October completed its acquisition of a majority stake in Gland Pharma. When the deal was initially announced in July 2016, the Chinese pharmaceutical company was to acquire all the shares of Gland Pharma owned by US private equity investor KKR and shares of its other shareholders. Cyril Amarchand Mangaldas (CAM) was domestic legal counsel and Simpson Thacher & Bartlett was international counsel to KKR and Gland Pharma.

The Chinese pharma company had agreed in July 2016 to acquire an 86.08% stake in Gland Pharma for US$1.2 billion, but faced with a failure by the Indian government to consider and clear the deal, it had to settle for a 74% stake valued at US$1.1 billion.

India allows up to 74% foreign direct investment in brownfield pharma under the automatic route. So, the Cabinet Committee on Economic Affairs, to which the Foreign Investment Promotion Board (FIPB) had referred the Chinese company’s acquisition, did not need to provide its approval.