According to persons familiar with the situation, billionaire Guo Guangchang’s Shanghai Fosun Pharmaceutical Group Co. is considering selling Indian pharmaceutical company Gland Pharma Ltd. after getting interest from prospective bidders.
According to the people, Fosun Pharma, a division of Chinese giant Fosun International Ltd. that is publicly traded, has been working with a consultant to measure interest in its majority position in Gland. Companies in the sector and buyout companies, according to the persons who asked to remain anonymous because the conversation is confidential, are only beginning to research the company.
Following the Bloomberg News report, Gland shares in Mumbai increased by as much as 5.7 percent, marking their biggest intraday increase in over a month. This year, they have decreased by around 53%, giving the business a market value of $3.6 billion. Shares of Fosun Pharma increased up to 5.4 percent in Hong Kong.
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According to its website, Hyderabad-based Gland focuses on injectable medications such antibiotics, cancer, and cardiology therapies and has operations in roughly 60 countries.
Gland Pharma ebbs as parent Fosun Pharma struggles and Street worries about profit.
The Chinese owner of Gland could obtain money through a sale as the formerly acquisitive business looks to strengthen its balance sheet. According to Bloomberg News, Fosun International has been considering its options for a number of assets, including French resort operator Club Med and certain domestic food and beverage businesses.
In a challenging funding environment, the high valuation expectations for Fosun Pharma could be a barrier to any potential acquisition, according to the sources. According to the persons, there is no guarantee that the discussions will result in a transaction because no formal sale process has yet been initiated.
Requests for response from Fosun Pharma’s representatives were not immediately returned, and a representative for Gland declined to comment.
In 2017, a group of investors led by KKR & Co. paid around $1.1 billion to sell Fosun Pharma a 74 percent share in Gland. According to information gathered by Bloomberg, it floated the company three years later in a $873 million initial public offering in Mumbai.