Med­i­cal M&A deals abroad to con­tinue

China Daily (Hong Kong) - - BUSINESS -

and on im­ple­ment­ing the “Healthy China 2030” pro­gram, he said.

“Ac­cord­ing to the ‘Made in China 2025’ strat­egy, phar­ma­ceu­ti­cal and health­care in­dus­tries will re­ceive fa­vor­able poli­cies and in­cen­tives for rapid growth. Through over­seas in­vest­ments, Chi­nese com­pa­nies can rapidly ob­tain so­phis­ti­cated tech­nol­ogy and equip­ment, thus im­prov­ing the level of China’s med­i­cal in­dus­try,” Li said.

The “Healthy China” guide­lines were is­sued in Oc­to­ber last year to pro­mote and im­prove health­care to a level seen in high-in­come coun­tries.

When the deals plan was an­nounced ear­lier, it was touted as the big­gest-ever Chi­nese cor­po­rate ac­qui­si­tion in In­dia.

But an In­dian of­fi­cial told Reuters that rea­sons for the de­lay in ap­proval at the high­est level “have more to do with giv­ing con­trol of a large pharma com­pany to a Chi­nese en­tity that it­self is fac­ing ques­tions from the reg­u­la­tors at home”.

Over­seas in­vest­ments by Chi­nese com­pa­nies in the med­i­cal sec­tor fell to just 10 deals worth $1 bil­lion in the fourth quar­ter of last year, and to nine deals worth $1.26 bil­lion in the first quar­ter of this year.

In Jan­uary, SanPower Group Co Ltd, a pri­vate Chi­nese com­pany with to­tal as­sets of 120 bil­lion yuan ($17.8 bil­lion), signed an agree­ment with Canada’s Valeant Phar­ma­ceu­ti­cals In­ter­na­tional Inc to buy 100 per­cent stake of US bio­phar­ma­ceu­ti­cal com­pany Den­dreon Corp.

In 2016, 29 Chi­nese phar­ma­ceu­ti­cal com­pa­nies clinched out­bound M&A worth $56.67 bil­lion, sig­nif­i­cantly sur­pass­ing $34.42 bil­lion in 2015. Five trans­ac­tions were worth over $500 mil­lion each, the DTT re­port said.

Last year, China’s over­seas and do­mes­tic health­care M&A rose to a five-year high in terms of both the num­ber of deals and trans­ac­tion value, while glob­ally, M&A in the sec­tor de­clined.

The DTT re­port pre­dicted that the do­mes­tic M&A boom is ex­pected to con­tinue this year.

Public hos­pi­tals, run by the gov­ern­ment or owned by State-owned en­ter­prises, will likely be­come hot tar­gets for M&A, it said.

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