Novartis to Spend $125 Million to Acquire Majority Stakes of Chinese Drug Maker
In a deal which is expected to cost the Swiss giant of the drug manufacturing sector nearly $125 Million, Novartis has revealed its plans to purchase a majority stake in Zhejiang Tianyuan, a privately held vaccines production firm in China. With the move, Novartis is planning to expand into the markets of a country which has been pegged as the world's third largest vaccines market.
The Basel based company has confirmed that it has reached an agreement which will lead to it acquiring 85% stake in the Chinese company. The deal, which is a part of Novartis's plan to become an industry leader in the drug manufacturing market and expand its limited presence overseas, is subject to approval from the Chinese Government and related authorities.
Tianyuan, which offers a wide range of marketed drugs across China, is being viewed by Novartis as one of the most lucrative vaccine manufacturers to partner with. The company has revealed that in 2008, Tianyuan has more than doubled its sales, as compared to 2006, to some $25 Million.
China, which is currently the world's third largest vaccines market, reports yearly sales of over $1 Billion. With the acquisition, Novartis is tapping into a market which it expects will grow by at least 10% annually in the coming times.
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