Shanghai Pharma to buy Cardinal Health China pharma distribution for $557m
Pharma acquisition news : In the latest pharma industry news, Shanghai Pharmaceuticals has struck a deal to buy the China pharma distribution business of US-based Cardinal Health for $557 million.
According to Reuters, Cardinal Health has been looking to quit from its pharma distribution business in the country in anticipation of a new drug distribution reform which it believes would not be good for its growth.
The transaction also covers $643 million worth of shareholder loans in Cardinal Health China whose enterprise value is $1.2 billion.
Commenting on the Shanghai Pharmaceuticals acquisition of Cardinal Health China, George Barrett, the Chairman and CEO of Cardinal Health, said: “It has been an honor to serve the people of China through our distribution business for the past seven years.
“We recognize that significant scale is required to be a market leader in China and with that in mind, we are delighted to announce that Shanghai Pharma has agreed to purchase our distribution business in China.”
According to the terms of the deal, Shanghai Pharma will add Cardinal Health China’s pharmaceutical and medical products distribution business in China.
The deal though would not include the remaining businesses of Cardinal Health in China such as Cordis – its recently bought Patient Recovery business, its medical sourcing team or other activities.
Zhou Jun, chairman of Shanghai Pharma, commenting on Shanghai Pharma acquisition of Cardinal Health China, said:
“Amid the national healthcare reform, the acquisition of the Cardinal Health China business will further strengthen our leadership in the distribution and retail pharmacy network, and expedite our transformation to become a modern global healthcare provider.
“This will also facilitate the growth of our pharmaceutical manufacturing business, enabling us to play a significant role in the Government’s ‘Healthy China’ initiative.”
Upon closing of this latest pharma industry deal, Cardinal Health China’s employees, infrastructure and several systems and processes related with its operations will be added to Shanghai Pharma.
Subject to meeting of all closing conditions and receipt of regulatory approvals, the transaction is slated to be wrapped up by the end of Cardinal Health’s fiscal year.
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