Faulding Pays $40M For 90% Stake In Drug Chinese Firm

Adelaide, Australia-based health care company F H Faulding & Co has taken a $40 million step into the Chinese market, said to be the world's seventh largest, in negotiating the purchase of a 90% stake in Foshan Horizon Pharmaceutical Company, based in Foshan, Guandong Province. Procedural matters are now being completed and the new company is expected to be operational on October 1.

The existing Foshan Horizon business is already one of the leading pharmaceutical companies in Guandong Province, China's most prosperous region, and has sales of around $20 million annually. With the involvement of Faulding, Foshan Horizon will operate two manufacturing facilities and a distribution center for western drugs as well as a separate distribution center for traditional Chinese medicines. The company's potential is expected to be greatly enhanced with a new plant about to begin operations and a range of new products to be launched.

Faulding will acquire its stake in Foshan Horizon by buying the Hong Kong-based Merrywise Company, which negotiated the Chinese foreign equity joint venture agreement, under which Foshan City retained a 10% interest. Of the $40 million payment, about $34 million will come from cash reserves and the balance through the issue of new Faulding shares.