2024-07-17 20:34:02
GC sells entire stake in Hong Kong corporation to China’s CR Pharmaceutical Group
The size of the stake sale is approximately 350 billion won
Distribution contract for albumin, green gin F, hyaluronic acid filler, etc.
“Expectations for improved financial soundness and increased exports to China”
GC녹십자 그룹 is starting to make full-fledged inroads into the global market, focusing on the US and China. Following the start of exports of blood product ‘Aliglo’ to the US this month, it has laid the foundation for local business through a strategic partnership with a Chinese pharmaceutical company.
GC (Green Cross Holdings) announced on the 17th that it signed a share purchase agreement (SPA) to sell all of its Hong Kong corporation’s shares to China Resource Boya Bio-pharmaceutial, a subsidiary of China’s CR (Hualun) Pharmaceutical Group. In addition, a separate distribution agreement was signed to sell GC Green Cross and GC Green Cross Wellness’ main products in China. An agreement was also signed to seek business synergies between the two companies.
CR Pharmaceutical Group is a Chinese state-owned enterprise that recorded sales of approximately 47 trillion won last year. According to this contract, GC will transfer all of its shares in the Hong Kong corporation (Green Cross HK Holdings Limited) to CR Pharmaceutical Group. The total sale price of the shares is approximately 350 billion won. Six companies, including a Chinese subsidiary (GC China) whose shares are entirely held by the Hong Kong corporation, will also be sold.
GC plans to improve its financial soundness through this equity sale while also using the funds raised for strategic investment in future businesses. In addition, it expects to expand its affiliates’ exports to the Chinese market through cooperation with CR Pharmaceutical Group, which has a nationwide distribution network.
The deal is led by Chinese brokerage CITIC Securities. CITIC Securities said the partnership between the two companies will be a major milestone for China’s blood product industry. CITIC Securities acted as financial advisor to GC on behalf of the company in this equity transaction.
In the case of product distribution contracts, CR Pharmaceutical Group will be in charge of the local distribution in China of blood product ‘Albumin’ and genetically recombinant hemophilia treatment ‘Greengene F’ produced at GC녹십자오창공장. CR Pharmaceutical Group will also be in charge of the distribution of GC녹십자웰빙 hyaluronic acid filler in China. In particular, it is evaluated that the efficiency of blood product production has been maximized by exporting immunoglobulin, one of the main products produced in the blood product production process, to the US and albumin to China. Looking at the market characteristics, the US is the world’s largest and highest-priced market for immunoglobulin, and China is the largest and highest-priced market for albumin.
The agreement for strategic alliance includes cooperation and licensing of technologies for blood products, vaccines, cell and gene therapy, diagnostics, etc., joint research and development, technology transfer, contract development and manufacturing (CDMO) services, etc. In addition, they agreed to jointly pursue product technology innovation in a comprehensive area.
The contracting entity, CR Boya Bio, is a subsidiary of CR Pharmaceutical Group and is a state-owned enterprise that conducts research and development, manufacturing, distribution, and retail of various pharmaceutical and healthcare products. It is known as one of the top three pharmaceutical companies in China, producing a total of 800 items. It is also the number one pharmaceutical company in the local over-the-counter (OTC) sector. It has approximately 230 logistics centers in 28 provinces in China.
A GC official said, “Through this strategic partnership, we will be able to eliminate the uncertainty surrounding our Chinese business that has persisted for so long and secure financial stability,” adding, “We will make a full-fledged global leap forward by advancing into the Chinese market together with the U.S.”
Kim Min-beom, Donga.com reporter [email protected]
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2024-07-17 20:34:02