MUMBAI: In what would be the first instance of large FDI from China in Indian manufacturing, Shanghai Fosun Pharmaceutical (Group) Co will sign a definitive agreement later on Wednesday to acquire a controlling stake in Hyderabad-based Gland Pharma in a $1.4 billion transaction, paving the way for the Chinese firm to expand its research and manufacturing capacity in India.Fosun has agreed to acquire 96 percent stake, which includes shares held by founders of Gland Pharma Ravi Penmetsa and family and private equity giant, KKR & Co LP. However another source said Gland will initially buy 86% of the company while Penmetsa may retain a 10% stake. The deal may need FIPB approval.“We will be signing the deal later today at Hong Kong and an official announcement will be made to the Chinese exchanges later,” said a source, with direct knowledge of the matter.When contacted, KKR and Gland Pharma promoters declined to comment. Fosun was not immediately reachable for a comment. ET reported on June 6 that Fosun has emerged as the front runner in a closely fought auction process, which saw US giant Baxter and private equity fund Advent make firm offers early May.Jefferies were running a formal auction process.The transaction will be the first billion dollar takeover of an Indian company by a Chinese one, with the few big deals confined to tech and ecommerce.The deal will have to get regulatory approvals from Indian authorities. As this will be a controlling acquisition by a Chinese player, the deal will undergo strict regulatory scrutiny. However, both KKR and Gland promoters do not expect any regulatory headwinds, one of the sources said.Shanghai Fosun Pharmaceutical (Group) Co, is part of FOsun International group, the flagship company of billionaire Guo Guangchang, one of China’s best-known entrepreneurs.Shanghai Fosun Pharmaceutical ended 2015 with revenue of $1.9 billion. Its market value was $8.3 billion as of 31 December 2015.With 17 deals worth $1.6 billion since 2010, Shanghai-based Fosun Pharma has grown rapidly through acquisitions. The company has a wide presence across business segments in the healthcare chain — drug manufacturing, distribution and retail to high-end diagnostics and medical devices. Fosun's portfolio covers liver diseases, diabetes, tuberculosis and diagnostic products, and it's also the leading provider of anti-malaria medicines globally.Founded in 1978, Gland is a leading contract manufacturer of injectables, supplying to companies in India and the US such as Dr Reddy's and Mylan.In November 2013, KKR bought an undisclosed stake in Gland from Evolvence India Life Sciences Fund for about $191 million, valuing the company at $600-650 million at the time.