ICN Agrees to Buy 75% of Chinese Drug Maker : Expansion: The company will also build a manufacturing plant in China as part of the deal.
Pursuing its longstanding foreign expansion program, ICN Pharmaceuticals said Thursday it has signed a preliminary agreement to acquire 75% of a Chinese drug company and to build a large manufacturing plant in southern China.
ICN, which already owns controlling interests in drug companies in Russia and Yugoslavia, would take over operation of 9-year-old Tuobin Chemicals & Pharmaceuticals General Corp., located in Guangdong province on the Chinese coast about 250 miles north of Hong Kong.
Terms of the deal were not disclosed, but ICN officials said it includes transfers of stock, technology and manufacturing equipment from the Costa Mesa-based company to Tuobin. The Chinese government, which now owns Tuobin, would retain a 25% interest in the company.
ICN plans to build a new pharmaceuticals plant in Guangdong province. The plant would become part of the new ICN-Tuobin Chemicals and would be situated near the existing Tuobin facility in the city of Shantou.
Company spokesman David Calef said the new plant would be at least as large as Tuobin’s existing 33,000-square-foot facility, which employs 600 people and sells about $31 million worth of drugs in China each year--mainly antibiotics, analgesics and anti-inflammatory products.
ICN has about 7,000 employees worldwide and last year posted gross sales of $366.9 million.
Terms of the deal likely will call for ICN to step up production of pharmaceuticals that can be exported, said Richard Torre, a partner at Garte Torre Global Capital Markets in Irvine. His company is helping a Chinese plastics manufacturer raise more than $5 million in a public offering in the United States later this year.
Torre said the Chinese government is actively pursuing deals such as ICN’s investment in Tuobin Chemicals in order to increase exports and the flow of foreign capital into China.
Calef said the deal does not spell out any export quota but added that ICN intends to produce pharmaceuticals in China for export to other makers.
ICN’s stock gained 25 cents Thursday, closing at $15.75 in light trading on the New York Stock Exchange.
