India cabinet clears KKR for Gland Pharma deal

KKR will invest $191 million in Gland Phama in a two-part transaction that includes the infusion of fresh equity followed by the purchase of a stake held by Invascent Capital's Evolvence India Life Sciences Fund. The deal will give KKR a 37.98% stake in the company.

The private equity firm also received approval to purchase a 29.4% stake in Gland Celsus from existing investors for $39.8 million as part of the same deal.

Established in 1978 and based in Hyderabad, Gland develops and produces active pharmaceutical ingredients (APIs) and injectable formulations for niche cardiovascular and orthopaedic drugs. The business primarily sells into the US market but has an increasing presence domestically and in other semi-regulated markets.

The deal was originally announced in November and approved by the Competition Commission of India (CCI) in January. The commission had raised concerns over the link between Gland Pharma and Glanda Celcus, with the latter holding a stake in the former, but cleared the deal after deciding the equity purchased will not have an adverse effect on competition.

However, final approvals are said to have been further delayed because of differences between government ministries regarding rules governing foreign direct investment (FDI) in the pharmaceutical sector.

India allows 100% FDI in new pharma sector projects through an automatic approval route but foreign investment in the existing companies requires approval from the Foreign Investment Promotion Board (FIPB). The FIPB has referred the decision to the Cabinet Committee on Economic Affairs in February.

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• Topics
• South Asia
• Healthcare
• Regulation
• Expansion
• India
• healthcare
• KKR
• regulation
• Growth capital