China Grand Pharmaceutical and Healthcare Holdings Ltd. agreed to acquire Taiwan Tung Yang International Co. Ltd. for about HK$1.90 billion.
Under the agreement, China Grand Pharmaceutical will pay 60% in cash and remaining 40% will come in the form of 181,069,959 new shares priced at HK$4.20 each.
Hong Kong-based China Grand Pharmaceutical was acquiring Taiwan Tung Yang for its principal asset — a 55% stake in Shanghai Xudong Haipu Pharmaceutical Co. Ltd., a manufacturer of pharmaceutical injections in China. The company also expects Taiwan Tung Yang's other businesses to improve its product pool, market share, brand and research capabilities.
Meanwhile, Shanghai China Grand Asset Finance Investment Management Co. Ltd. agreed to subscribe for 228,148,148 China Grand Pharmaceutical shares, priced at HK$5 each.
The group expects to raise net proceeds of about HK$1.14 billion, which will help fund the Taiwan Tung Yang acquisition. China Grand Pharmaceutical said it will also use proceeds to improve its financial position, broaden its capital base and support its future growth.
