Beijing Med-Pharm Corp., a pharmaceutical marketing and distribution company, said it intends to acquire a majority stake in China drug distributor Shanghai Rongheng Pharmaceutical Co., Ltd. for an undisclosed sum. Beijing Med-Pharm will buy a 70 percent stake in Rongheng.

The deal, which is expected to close in the second quarter, is subject to several conditions, including approval by China's central government.

Rongheng distributes more than 400 pharmaceutical products to more than 250 hospitals in Shanghai, which is China's largest city with 17 million residents. Beijing Med-Pharm said Rongheng generated $12 million in revenues in 2006.

In a statement, David Gao, Beijing Med-Pharm's chief executive officer, said the proposed acquisition is the second significant deal in China to establish a "unique proprietary distribution network" there. He said the company expects to also expand in the Guangdong province through another venture.

Rongheng is currently owned by Shanghai CAS Shenglongda Biotech (Group) Co., Ltd. and Shanghai Rongheng International Trade Co. Ltd. of Orient International (Holding) Co. In January, Beijing Med-Pharm said it was the winning bidder in a sale of shares for Rongheng.

Source:佚名