Business
20:03, 14-Aug-2017
China's Fosun, Shanghai Pharma announce bids for stake in US drugmaker Arbor
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A unit of China's Fosun Group and Shanghai Pharmaceuticals Holding Company are among the bidders for a stake in US speciality drugmaker, Arbor Pharmaceuticals LLC, both companies said on Monday.
The bids come as Chinese companies face tightening scrutiny on their overseas investments.
Chinese regulators are reviewing deal agreements in minute detail and have cracked down on some large domestic conglomerates, including Fosun, for their debt-fueled acquisitions abroad.
Shanghai Fosun Pharmaceutical Group Co., Ltd. said in a stock exchange filing its Hong Kong unit submitted on July 19 for a nonbinding bid for a stake in Arbor, which is backed by private equity firm KKR & Co LP.
In a separate filing, Shanghai Pharma also said it had submitted a nonbinding bid for a stake in Arbor on the same day.
VCG Photo
VCG Photo
Neither companies disclosed the quantum of stakes they had bid for nor the financial terms but said they have not entered exclusive talks with the seller.
Fosun Pharma said its Hong Kong unit will begin conducting due diligence to determine further steps.
Arbor has appointed Bank of America Merrill Lynch to run the sale process, which has attracted around half a dozen preliminary bids, mostly from Chinese companies and private equity firms, according to sources familiar with matter.
The bank did not immediately respond to a Reuters request for comment.
Some of the bidders may seek to acquire control of the company, said two of the people, adding that discussions are still at an early stage.
A potential deal could value Arbor at around 3 billion dollars, two of the people said.
Bloomberg, which first reported the sale process, said the bidders were seeking to buy 20 to 30 percent of Arbor.
The sources could not be named as discussions are confidential.
Atlanta-based Arbor produces mainly branded prescription drugs for the paediatric, hospital and cardiovascular markets.
New York-based KKR agreed to buy more than a quarter of shares in the company in December 2014, in a deal that valued privately held Arbor at over 1 billion dollars.
Source(s): Reuters