Shanghai Pharmaceutical Holding Co Ltd, China's second-largest drug company by revenue, said on Tuesday that it plans to acquire a 55.45 percent stake in China Health System Ltd, as part of its efforts to tap into the country's northern market.
The price of the deal, which has yet to be officially revealed, may rise as high as 4 billion yuan ($603 million) according to the Shanghai-based Oriental Morning Post, which cited anonymous company sources. If so, it would become the country's largest transaction in the pharmaceutical sector.
Triggered by the announcement, the drugmaker's shares jumped 10 percent in Shanghai trading to a record high of 26.19 yuan during Tuesday's morning session. They ended the day 7.94 percent higher at 25.7 yuan, when compared with the major index's 1.61 percent retreat.
The State-owned company said in a statement released to the Shanghai Stock Exchange on Tuesday that it has already granted 20 million yuan to its subsidiary, SIIC Medical Science and Technology (Group) Ltd, to fund the upfront payment of the deal
Shanghai Pharmaceutical, the biggest drug distributor in East China whose drug distribution business reached 23.5 billion yuan in 2009, has targeted North and South China as prime areas for the development of its business. Those three regions account for more than half of all the medicines consumed in the country.
The price of the deal, which has yet to be officially revealed, may rise as high as 4 billion yuan ($603 million) according to the Shanghai-based Oriental Morning Post, which cited anonymous company sources. If so, it would become the country's largest transaction in the pharmaceutical sector.
Triggered by the announcement, the drugmaker's shares jumped 10 percent in Shanghai trading to a record high of 26.19 yuan during Tuesday's morning session. They ended the day 7.94 percent higher at 25.7 yuan, when compared with the major index's 1.61 percent retreat.
The State-owned company said in a statement released to the Shanghai Stock Exchange on Tuesday that it has already granted 20 million yuan to its subsidiary, SIIC Medical Science and Technology (Group) Ltd, to fund the upfront payment of the deal
Shanghai Pharmaceutical, the biggest drug distributor in East China whose drug distribution business reached 23.5 billion yuan in 2009, has targeted North and South China as prime areas for the development of its business. Those three regions account for more than half of all the medicines consumed in the country.
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