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HONG KONG—China's Fosun Group is near to buying control of Gland Pharma Ltd. from shareholders including KKR & Co. in a deal that values the Indian pharmaceutical company at more than $1.35 billion, according to a person familiar with the situation.

Expected to be announced in the coming days, the deal would be China's largest takeover of a company in India. The largest Chinese deal maker in India had been China's top online-shopping company, Alibaba Group Holding Ltd. Last year, its financial affiliate put $1 billion into the operator of Indian payment firm Paytm, and an Alibaba-led group invested in Indian online retailer Snapdeal.com.

India's multibillion-dollar pharmaceutical industry dominates the world's generic-drug market. Gland Pharma's generic injectables—including Heparin, which prevents blood clots following surgery—are sold primarily in the U.S. market.

Foreign businesses and investors can now buy up to 74% of Indian drugmakers without government approval, a change announced last month as one of a series of measures relaxing rules on foreign investment and further liberalizing India's economy. Foreign takeovers of pharmaceutical companies had previously required government approval, which led to long delays.

The Gland Pharma deal will be the first in India by Fosun, one of China's most acquisitive conglomerates. Chairman Guo Guangchang told The Wall Street Journal in March that a rapid rise of asset prices in the U.S. and Europe has Fosun looking for deals in developing markets, including India.

KKR, the U.S. private-equity firm, is a major investor in Gland, and the sale of its shares along with those of other existing shareholders will give Fosun a controlling stake, the person familiar with the situation said.

Trading in two Fosun units—Shanghai Fosun Pharmaceutical (Group) Co. Ltd. and Fosun International Ltd.—were halted in Hong Kong Thursday pending an announcement. India's Economic Times newspaper first reported Fosun's plan.

Established in 1978 and based in Hyderabad, Gland Pharma pioneered prefilled, single-use syringes in India and has a presence in about 90 countries. KKR bought a minority stake for about $200 million in November 2013, saying the company had a record of strong financial performance.

Fosun has global interests in property, entertainment, and insurance. Its portfolio includes French resorts operator Club Mé diterrané e SA, a stake in Canadian circus troupe Cirque du Soleil and One Chase Manhattan Plaza, a prime property in lower Manhattan.

Indian health-care companies have been a popular target for global acquirers. Two of the country's 10 largest foreign acquisitions have been of drugmakers: Ranbaxy Laboratories Ltd., bought by Japan's Daiichi Sankyo Co. for $5.5 billion in 2008, and the generics unit of Piramal Healthcare Ltd., bought by Abbott Laboratories of the U.S. $3.8 billion in 2010.

Shefali Anand Mumbai and Wei Gu in Hong Kong contributed to this article.

(END) Dow Jones Newswires

July 28, 2016 07:55 ET (11:55 GMT)

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