Purchasing Citic Medicine to accelerate the integration of pharmaceutical channels

China's pharmaceutical business sector, mergers and acquisitions of smoke is strong. November 30, Shanghai Pharmaceutical Group Co., Ltd. (601607. SH) said it would acquire a controlling stake in China Health System (hereinafter called "CHS", registered in Caimas, Is.), which owns Beijing's third-largest pharmaceutical distributor, Citic Pharma Industrial Co., Ltd. (hereinafter referred to as "Citic Medicine").　　About 4 billion of the turnover will be the largest in the domestic pharmaceutical commercial sector acquisition. Shanghai Pharma has acquired a 2.63354% per cent stake in CHS held by Northern Light Venture Capital II, the Shanghai Industrial Pharmaceutical Technology Group, a wholly-owned subsidiary of Caimas, Is., which was registered on November 29, the bulletin showed.　　On the same day, Shanghai Pharma and its wholly-owned subsidiary, Shanghai Industrial Medicine Technology Group, has reached an "irrevocable exclusive acquisition" of the 55.45% stake held by the CHS shareholder, the NEA China Fund, the Lilly Asia Venture Fund and the CHS Fund. CITIC Pharmaceutical main business focus on the Beijing market, the market share ranked third in the region. 2009, Citic Medicine to achieve sales revenue of 4.3 billion yuan, 2010 is expected to achieve net sales revenue of more than 6 billion yuan. After the completion of the acquisition, Shanghai Pharmaceutical will be in Beijing market more than the Chinese Medicine Holding (1099.HK), leaped second, after the North medicine shares. Beijing is the second largest pharmaceutical market in the country after Shanghai. According to the Chinese Pharmaceutical Business Association statistics, 2009 Beijing region's total sales of pharmaceuticals has exceeded 50 billion yuan, the composite growth rate of nearly three years as high as 28%.　　2009, Shanghai Pharmaceutical Pharmaceutical distribution business scale of 23.5 billion yuan, ranked second in the country, the first in east China. "We're still doing our due diligence, and we're going to be done by the end of the year," he said.　　"30th, Shanghai Medical Secretary Han Min, said in an interview with reporters, although the specific purchase price is still undecided, but the market estimates of about 4 billion of the price is" almost. " It is worth mentioning that in the second half of 2010, CHS has launched the Hong Kong Red chip listing. If the acquisition is completed, the CHS to the Hong Kong listing will be suspended. "To buy a company that has already started the listing process, and it was won after competition with the Chinese medicine, the price should be very high, it can be seen that the heart of the acquisition is very firm."　　Industry insiders say. Han Min to reporters that can reach the acquisition intention, bid is an aspect, the current business layout and Citic Medicine has a certain complementarity, but also Citic Medicine is willing to cooperate with the important reasons. "We are a whole-industry chain of pharmaceutical groups, some of its industrial varieties can enter its distribution network, Citic Medicine also attractive."　　"The accelerated integration of medical channels has been a clear strategy for the medicine." In September this year, Shanghai Pharmaceuticals announced that it is expected to raise no less than 8 billion yuan for the initial public offering of foreign investors, no more than 25% of the shares of the total share capital, which is mainly used for mergers and acquisitions of domestic and overseas pharmaceutical projects, and for the pharmaceutical Business NetworkConstruction and mergers and acquisitions.　　Since the end of 2009, the new medicine has quickly completed a number of mergers and acquisitions, acquisition targets include Guangzhou Zhongshan Medical, Shandong Business Union Biochemistry, Changzhou Asia State Pharmaceutical, Fujian pharmaceutical companies and other local pharmaceutical distribution companies. At the same time, the company also has extensive exposure to acquisitions in the market.　　There are signs that the era of mergers and acquisitions in the pharmaceutical industry has come and that the prices available for acquisitions in the market are "rising." In this respect, Lu Mingfang, chairman of Shanghai Pharmaceutical Group, said that from the historical experience of the developed countries, this is a "necessary process" for the development of the pharmaceutical distribution field, although the acquisition price will increase, but still based on reasonable value of the bid.　　According to the national strategy of speeding up the cultivation of large pharmaceutical enterprises, the competition of pharmaceutical distribution network resources becomes the most important field of merger and acquisition. According to the Domestic Pharmaceutical Business association data, the domestic existing more than 13,000 wholesale enterprises, 90% of small enterprises, of which the top 10 of the market share is only 36%, and the United States the top three market share has exceeded 90%. Facing the industry "scattered, disorderly" status quo, the Ministry of Commerce has made it clear that to improve the concentration of the industry, encourage large enterprises mergers and acquisitions.