(Yicai Global) Aug. 10 -- Xinlong Holding (Group) Ltd. Company Ltd. [SZ:000955] announced its plan to acquire two pharmaceutical companies for CNY832 million (USD125 million).
Xinlong Holding, was established in 1993, is the largest nonwovens manufacturer in Asia and supplies hygiene, medical, and industrial markets. The two pharmaceutical companies to be acquired are Shanxi Huawei Pharmaceutical Co., Ltd. and Anhui Dechang Pharmaceutical Co., Ltd. Xinlong proposed acquisition of 100 percent of Shanxi Huawei equity for CNY600 million (USD 89.78 million), as it specializes in cardiovascular patented traditional Chinese medicines.
There is a large market for such drugs as the total number of cardiovascular patients in China is estimated to be 290 million, of whom 4.5 million are diagnosed with heart conditions, according to the 2016 China Cardiovascular Disease Report released by China's National Center for Cardiovascular Diseases.
The second acquisition, Anhui Dechang specializes in Chinese herbal medicine planting and Traditional Chinese Medicine (TMC) manufacturing. In the deal, Xinlong proposed to acquire 70 percent of its equity at CNY232 million (USD 34.8 million).
Xinlong announced it would divert the focus of its business operations to TMC product development, thus creating a highly integrated TMC industry chain covering Chinese herbal medicine planting, patented TMC research and development, production and sales. The deals are an important step to realize a shift in the strategic positioning of the listed company toward the "mega healthcare" market.
Xinlong Holding was suspended from trading on April 8 and resumed trading on August 10.