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China Grand Pharmaceutical to buy Shanghai Winguide for 1.55B yuan

China Grand Pharmaceutical and Healthcare Holdings Ltd. is acquiring Shanghai Winguide Huangpu Pharmaceutical Co. Ltd. for about 1.55 billion Chinese yuan.

Under the deal, China Grand will pay for the acquisition in cash, subject to certain adjustments.

The Hong Kong-listed company intends to fund the acquisition via a combination of proceeds from the issue of new shares to Shanghai China Grand Asset Finance Investment Management Co. Ltd., priced at HK$5.20 per share, and a potential placement of 131 million shares; internal resources of China Grand; and other financial resources.

Shanghai Winguide is one of the biggest generic drugmakers in China with 90% of its products being over-the-counter medicines, and 50% of the products listed on the National Medical Reimbursement List. The acquisition is expected to strengthen China Grand's product line of OTC medicines in the Chinese market and widen its distribution network.

The deal is subject to shareholder and regulatory approval, as well as due diligence. Outwit Investments Ltd., a controlling shareholder of China Grand with a 56.86% stake, has given its written approval for the acquisition.

Hong Kong-based China Grand is an investment holding company that manufactures and sells pharmaceutical preparations and medical devices, among others.

As of May 31, US$1 was equivalent to 6.41 Chinese yuan.