Shionogi makes $185 million offer for China's C&O Pharma; reports first-quarter results

Japanese drug major Shionogi (TKO: 4507) says it has signed an agreement to acquire the Chinese drugmaker C&O Pharmaceutical Technology for around 14.3 billion yen ($185.3 million), or 0.50 Singapore dollars a share, in order to expand its presence in this important market.

Shionogi will acquire 160,312,000 C&O shares (about 24.17% of the total shares issued in C&O) out of 193,480,000 C&O shares (about 29.17% of the total shares issued) held by Leo Star and Gao Bin. Completion of the transaction is subject to fulfillment or waiver by Shionogi of certain conditions. After the transaction, Shionogi will conduct a general offer in accordance with the agreement and the Singapore code on take-overs and mergers, with an intention to make C&O into Shionogi’s subsidiary. The total consideration for the Transaction and the general offer to be made thereafter is expected to be around S$219 million.

After completing the deal, Gao Bin will remain as executive director (vice chairman and general manager) of C&O, and he will continue to hold his remaining about 5% of the total shares issued in C&O indirectly, through Leo Star, during this designated period of his service in C&O. In addition, Shionogi intends to jointly operate C&O with Sumitomo Corp, which holds about 29% of the total issued shares in C&O.