Sinopharm to merge with CNBG
Shanghai. September 17. INTERFAX-CHINA - China National Pharmaceutical Group Corp. (Sinopharm) will merge with China National Biotech Group (CNBG) this year, the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council announced on Sept. 16.
"The merged company will retain the Sinopharm name. CNBG will become a biotech-focused business unit of Sinopharm, which is lagging in that area at present. The merger is expected to be complete within this year," Zhu Jingjin, Sinopharm's spokesperson, told Interfax on Sept. 17.
"Meanwhile, Sinopharm is in negotiations to merge with the Shanghai Institute of Pharmaceutical Industry (SIPI), another state-owned company that focuses on drug and medical device research and development, as part of the next step," Zhu said.
"Sinopharm's strength lies in drug sales and distribution, while CNBG is specializes in biological product R & D. As such, Sinopharm may not have the experience to properly manage and develop its new biotech business," a CNBG employee, who wished to remain anonymous, said.
According to the announcement, as the two companies are both directly controlled by the central government, the merger will reduce the number of central government-controlled companies from 136 to 135.
Meanwhile, Sinopharm's 53 percent-owned joint venture, Sinopharm Group Co. Ltd., raised HKD 8.73 billion ($1.13 billion) from its initial public offering on the Hong Kong Stock Exchange on Sept. 16 through the issue of 545.68 million shares at HKD 16 ($2.07) per share. It raised the maximum amount as investors purchased shares at top end of the stipulated share price range.
The listed subsidiary will start trading on Sept. 23, becoming the largest listed company in the domestic pharmaceutical industry.
Sinopharm is China's largest pharmaceutical group company, with 10 wholly-owned subsidiaries. It generated sales revenue of RMB 45.2 billion ($6.62 billion) in 2008.
CNBG is a research-driven biotech company that discovers, develops, manufactures and markets vaccines, blood derivatives, biopharmaceuticals and diagnostic reagents.
-YCX