17 Nov, 2011

Last week, (Nov. 8th) the Indian government took a look at its foreign investment rules, and amended them to require existing Indian pharmaceutical companies to seek government approval for foreign direct investment (FDI).


However, FDI in greenfield pharmaceutical ventures are allowed to be made without any such approval.


The pharmaceutical sector in India has been particularly buoyant regarding M&A activity over the past year, with several high profile acquisitions of Indian companies by international pharma companies taking place. Such transactions included the acquisition of Matrix Laboratories Ltd by Mylan Inc. in the U.S., Ranbaxy Laboratories Ltd by Daiichi Sankyo Company Ltd in Japan, and Piramal Healthcare Solutions Business by Abbott Laboratories in the U.S.


The stricter rules from the Indian government are part of the response to concerns raised following this boom in M&A activity regarding the strictness of the deal environment and whether it should be tightened. The new, stricter regime for foreign acquisitions, which will be reviewed after six months, comes at the same time that the government is looking to amend its drug price control policy.


Picture: Indian Parliament Building

About the author

Related Posts

Leave a reply