CHINARES PHARMA: CR Sanjiu plans to spend approximately 6.212 billion yuan to acquire 28% equity of Tianjin Tianyao Pharmaceuticals

According to the news from Zhitong Finance and Economics APP, China Resources Pharmaceutical (03320) announced that on August 4, 2024, China Resources Sanjiu entered into a share purchase agreement with the seller. Based on this, China Resources Sanjiu has conditionally agreed to purchase, and the seller has conditionally agreed to sell a total of 418 million shares of Tianjin Tasly Pharmaceutical (equivalent to 28% equity of Tasly Pharmaceutical as of the date of this announcement) at a price of RMB 14.85 per share, totaling approximately RMB 6.212 billion. Upon completion, China Resources Sanjiu will hold 28% equity of Tasly Pharmaceutical and become the largest shareholder of Tasly Pharmaceutical, while Tasly Pharmaceutical will be accounted for as a non-wholly-owned subsidiary of the company.

The seller includes Tasly Biopharmaceutical, Tianjin Heyue, Tianjin Kangshun, Tianjin Shunqi, Tianjin Shanzhen, Tianjin Tongming, and Tianjin Hongxun. Tasly Pharmaceutical and its subsidiaries are mainly engaged in the research and development, production, wholesale, and distribution of pharmaceuticals. Its business scope covers traditional Chinese medicine, biopharmaceuticals, and chemical drugs, focusing on modern Chinese medicine for the treatment of cardiovascular and cerebrovascular diseases, digestive and metabolic diseases, and tumors. Tasly Pharmaceutical's shares have been listed on the Shanghai Stock Exchange since August 2002 (Stock Code: 600535).

For the year ended December 31, 2023, Tasly Pharmaceutical achieved revenue of approximately RMB 8.67 billion. With its rich experience in the Chinese pharmaceutical industry, Tasly Pharmaceutical was recognized as one of the annual outstanding Chinese national medicine brand enterprises from 2022 to 2023.

For the years ended December 31, 2022 and December 31, 2023, Tasly Pharmaceutical's post-tax net losses were HKD 380 million and post-tax net profit was HKD 1.11 billion, respectively.

The announcement stated that the proposed acquisition is in line with the group's strategic development. Leveraging Tasly Pharmaceutical's competitive advantage in the modern Chinese medicine industry, it is expected that the proposed acquisition will promote the group's international development through synergies. The proposed acquisition is expected to enhance China Resources Sanjiu's core competitiveness, improve its business scale and profitability, aiming to further strengthen the overall operational capabilities and performance of the group.

Furthermore, on August 4, 2024, the company also entered into a strategic cooperation agreement with Tasly Pharmaceutical. Based on this, the parties agreed to conduct comprehensive strategic cooperation in the Chinese digital traditional Chinese medicine industry, innovative model research and development, intelligent manufacturing technology and equipment, prescription drug channels, industrial innovation, etc., strengthen industrial investment layout in Tianjin, promote the globalization of the traditional Chinese medicine industry and the economic development of Tianjin, and agree to deepen the comprehensive strategic cooperation starting from the cooperation with Tasly Pharmaceutical, ultimately achieving strong alliance and win-win cooperation