The Ministry of Commerce (MOFCOM) of the People's Republic of China has approved Beijing Med-Pharm Corporation's acquisition of a 50 percent stake in Guangzhou Pharmaceuticals Corporation (stock code: 600332) )through Alliance BMP Limited.
Alliance BMP is a UK-based investment vehicle, which is 80 percent-owned by Alliance Boots plc, Europe's leading pharmacy-led health and beauty group, and 20 percent-owned by Beijing Med-Pharm.
The transaction, in which Alliance BMP Limited will make a total capital investment of $72.2 million in cash in exchange for a 50 percent ownership interest, is expected to close before the end of the year. Alliance BMP will hold four of the eight GP Corp. board seats and Mr David Gao, CEO of Beijing Med-Pharm and one of the principal participants in the negotiation of the transaction, will serve as Chairman of GP Corp.
“Approval from MOFCOM is a critical step towards completion of the acquisition by Alliance BMP Limited of 50 percent of GP,” said Mr Gao. “When the transaction is completed, we will gain a major international partner in Alliance Boots, a collaboration that may open additional opportunities for both companies.”
GP Corp. is a subsidiary of Guangzhou Pharmaceutical Company (GPCL), a company listed on the Hong Kong and Shanghai Exchanges. GPCL will retain ownership of the remaining 50 percent of GP Corp.
GP Corp. has grown rapidly in recent years, with annual revenues increasing from $565 million in 2003 to $0.9 billion in 2006. GP Corp. serves more than 12,000 hospitals, pharmacies, and other wholesalers from eight distribution facilities located throughout Guangdong Province and southeast China.