Shanghai Pharma to acquire majority stake in China Health System for up to $600 million: GlaxoSmithKline on China hunt?

Shanghai Pharmaceutical Holding, China's second-largest drug company by revenue, said on Tuesday that it plans to acquire a 55.45% stake in China Health System, as part of its efforts to tap into the country's northern market, reports the People’s Daily newspaper, in what looks to be the biggest acquisition in China’s drug distribution sector.

The price of the deal, which has yet to be officially revealed, may rise as high as 4 billion renminbi ($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.

As a result of the news, the drugmaker's shares jumped 10% in Shanghai trading to a record high of 26.19 renminbi during Tuesday's morning session. They ended the day 7.9% higher at 25.7 renminbi, compared with a 1.6% fall in the major index.