China Inc. Goes on a Buying Spree for Global Health Assets - (Bloomberg via NewsPoints Desk)

  • Chinese companies have announced more than $3.9 billion in overseas acquisitions in the pharmaceutical, biotechnology and healthcare sectors this year, a pace on track to exceed last year's record total and a ten-fold increase from the amount spent in 2012, reported Bloomberg.

  • According to the news source, the surge is driven by Chinese tycoons and businesses seeking to diversify in the face of slowing domestic growth and a government push to upgrade the "Made in China" brand.

  • Among recent deals, China's Creat Group agreed to acquire UK-based human blood plasma manufacturer Bio Products Laboratory for $1.2 billion, while Shanghai Fosun Pharmaceutical made a non-binding offer to buy 96 percent of India's Gland Pharma, which is focused on injectable drugs.

  • "There's a few Chinese companies that have been investing in pharmaceutical products that are getting close to being approved in the US and Europe," noted George Lin, head of Asia consumer, retail and healthcare investment banking at Bank of America, adding "if those are approved, then the Chinese are likely to be much more interested in pursuing overseas targets in similar areas that have a strategic alignment."

  • Meanwhile, Indian drugmakers with strong generic drug expertise and commercial presence in developed markets offer a good platform for globalization for Chinese firms, according to Franck Le Deu, a senior partner at McKinsey & Co.

  • Lin suggested that Chinese companies can fit in very well when there is no big logical strategic player and buyers are down to private-equity firms in an auction. "The really attractive products, the biotechnology products, those are going to be highly sought after by the mega caps…So the Chinese are not going to be competitive."

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