(Yicai) Dec. 10 -- Shares in Shandong Xinhua Pharmaceutical advanced as much as 3.6 percent today after the Chinese drugmaker said it intends to buy a controlling stake in the Chinese unit of Holland’s NovoSana Europe, which processes fish oils for use in health supplements.

Xinhua Pharma’s share price [SHE:000756] closed up 0.4 percent at CNY16.34 (USD2.20). Earlier in the day it hit CNY16.85.

Xinhua Pharma will purchase a maximum of 75 percent equity in NovoSana Taicang, which is one of the leading refiners of Omega-3 polyunsaturated fatty acids in China, the Zibo-based company said yesterday, citing the share acquisition intention agreement signed by the two parties that day.

The take over will enable Xinhua Pharma, which already has three high-purity fish oil supplements on the market, to achieve a high degree of synergy between the two parties' fish oil businesses, it said. It will enhance the company’s overall operational efficiency and competitiveness in the health sector.

Xinhua Pharma will have four months to acquire the assets and the transaction price will be negotiated after due diligence has been completed and the asset audit and evaluation results reviewed, it added.

NovoSana Europe is a supplier of high-quality Omega-3 polyunsaturated fatty acids, which are a type of fatty acids that play an important role in human health but which the body cannot synthesize on its own. They mainly come from deep-sea fish, seals and certain plants. The Amsterdam-based company’s main clients are manufacturers of health supplements, food and beverages, as well as animal nutrition products.

Editor: Kim Taylor