* Fosun to buy 74 pct in Gland Pharma
* Deal no longer needs Indian govt nod, seen closing in 2 weeks
* Deal will be China’s biggest acquisition in India (Adds more context, company background)
By Dominique Patton and Zeba Siddiqui
BEIJING/MUMBAI, Sept 17 (Reuters) - Shanghai Fosun Pharmaceutical Group is trimming the size of the stake it will buy in India’s Gland Pharma to 74 percent for $1.1 billion, in a bid to salvage the stalled deal that would be the biggest takeover by a Chinese firm in India.
Fosun Pharma had struck a deal in July last year to buy an 86 percent stake valued at about $1.26 billion in the Indian generic injectable drugmaker, but the deal had raised concerns among some in the Indian government, a source had told Reuters previously.
India allows foreign investment of up to 100 percent in its pharmaceutical sector but above 74 percent requires government approval.
Two sources with knowledge of the matter told Reuters that the Chinese drugmaker had agreed to lower the stake it planned to acquire in Gland to 74 percent, mainly because it sought to get the deal completed more smoothly and faster. Gland is backed by private equity firm KKR & Co LP.
Fosun said in a statement on Sunday the deal no longer required a nod from India’s Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi. It said it had already received approval from Chinese regulators and applied for antitrust approval in the United States and India.
The Chinese drugmaker added that Gland Pharma’s founding family wanted to retain a bigger holding in the Indian company because of its good performance.
Gland managing director Ravi Penmetsa told Reuters some approvals the original deal had received were at risk of expiring.
“Now with this new agreement, we won’t have to reapply for those,” he said, adding that he expects the deal to be completed in two weeks.
Fosun Pharma’s parent, Fosun International, has been the poster child for China’s decade-long overseas push that saw Chinese bidders spend a record $105 billion on assets ranging from film studios to football clubs in 2016.
Best known outside China for its acquisition of French resort chain Club Med, Fosun International was among acquisitive firms that found itself in the cross-hairs of Chinese authorities, sources have said.
But its executives said in late August that Fosun would continue to conduct overseas deals and scout for targets in areas including drug manufacturing.
Fosun Pharma said in mid-August it was bidding for a stake in U.S. specialty drugmaker Arbor Pharmaceuticals LLC.
On Sunday Fosun Pharma said it would spend no more than $25 million to market the Indian company’s enoxaparin blood-thinning drug in the United States, when it obtains approval there, cutting the previously proposed marketing spend by half.
In a statement on Sunday, Gland said the deal would allow it to make biosimilars - lucrative copies of biotech drugs - at Fosun’s site and sell them in India.
“It won’t happen overnight, but we have started working on it,” Penmetsa said.
Penmetsa and his father, P.V.N. Raju, will remain on the Gland board and the current management team will continue to run the company.
Reporting by Dominique Patton in BEIJING and Zeba Siddiqui in MUMBAI; Additional reporting by Julie Zhu and Elzio Barreto in HONG KONG; Editing by David Goodman and Muralikumar Anantharaman