Several private equity bidders submitted non-binding offers for the unit last week, source say
31 January 2024 - 15:57
byKane Wu and Roxanne Liu
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Hong Kong — Drugmaker Mundipharma International, owned by the billionaire Sackler family, has restarted a process to sell its China unit in a deal that may fetch more than $1bn, two sources said, joining other multinational companies seeking to exit China.
A number of private equity bidders submitted non-binding offers for the China unit last week, said one of the sources and a third person familiar with the matter, all declining to be named as the information is confidential.
Mundipharma is among a slew of multinational companies looking to divest from China amid the country’s economic slowdown, strong local competition and geopolitical headwinds.
Last week, Reuters reported, US aerospace supplier Arconic Corporation, controlled by private equity firm Apollo Global Management, is selling its China business as it’s subscale to the rest of the company.
Mundipharma had hired Deutsche Bank to run an auction for the China business in 2021, which attracted Boyu Capital, CITIC Capital and state-owned Sinopharm as bidders, Reuters reported at the time.
The potential buyers failed to reach agreement with Mundipharma due to valuation and contract-related issues, the first two sources said.
Mundipharma decided to restart the sale after resolving some of the issues and improving the financial performance of its China business, said one of the sources.
The Chinese business is expected to generate 2023 earnings before interest, taxes, depreciation, and amortisation of more than $100m, said one of the two sources and the third person.
Mundipharma and its China unit declined to comment. Deutsche Bank, which remains Mundipharma’s adviser, also declined to comment.
Mundipharma, which is based in Cambridge, Britain, has a presence across four continents. It generated $1.7bn in global sales in 2022 from drugs for pain management, oncology and respiratory diseases, among others, its website showed.
The company, which launched its China business in 1993, lists a number of pain relief drugs on its Chinese website, including OxyContin, which is used to help relieve medium-to-severe ongoing pain, mostly applied to cancer patients.
The painkiller product is at the centre of a $6bn settlement the Sacklers agreed to pay for another of their drug companies, Purdue Pharma, to resolve opioid-related litigation in the US.
The Sacklers had proposed to use at least $1.5bn from a sale of Mundipharma assets for the Purdue settlement.
However, President Joe Biden’s administration appealed to the Supreme Court in August over the ruling of a lower court in favour of the settlement. The Supreme Court has yet to rule on the appeal.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Mundipharma ‘restarting China unit sale’
Several private equity bidders submitted non-binding offers for the unit last week, source say
Hong Kong — Drugmaker Mundipharma International, owned by the billionaire Sackler family, has restarted a process to sell its China unit in a deal that may fetch more than $1bn, two sources said, joining other multinational companies seeking to exit China.
A number of private equity bidders submitted non-binding offers for the China unit last week, said one of the sources and a third person familiar with the matter, all declining to be named as the information is confidential.
Mundipharma is among a slew of multinational companies looking to divest from China amid the country’s economic slowdown, strong local competition and geopolitical headwinds.
Last week, Reuters reported, US aerospace supplier Arconic Corporation, controlled by private equity firm Apollo Global Management, is selling its China business as it’s subscale to the rest of the company.
Mundipharma had hired Deutsche Bank to run an auction for the China business in 2021, which attracted Boyu Capital, CITIC Capital and state-owned Sinopharm as bidders, Reuters reported at the time.
The potential buyers failed to reach agreement with Mundipharma due to valuation and contract-related issues, the first two sources said.
Mundipharma decided to restart the sale after resolving some of the issues and improving the financial performance of its China business, said one of the sources.
The Chinese business is expected to generate 2023 earnings before interest, taxes, depreciation, and amortisation of more than $100m, said one of the two sources and the third person.
Mundipharma and its China unit declined to comment. Deutsche Bank, which remains Mundipharma’s adviser, also declined to comment.
Mundipharma, which is based in Cambridge, Britain, has a presence across four continents. It generated $1.7bn in global sales in 2022 from drugs for pain management, oncology and respiratory diseases, among others, its website showed.
The company, which launched its China business in 1993, lists a number of pain relief drugs on its Chinese website, including OxyContin, which is used to help relieve medium-to-severe ongoing pain, mostly applied to cancer patients.
The painkiller product is at the centre of a $6bn settlement the Sacklers agreed to pay for another of their drug companies, Purdue Pharma, to resolve opioid-related litigation in the US.
The Sacklers had proposed to use at least $1.5bn from a sale of Mundipharma assets for the Purdue settlement.
However, President Joe Biden’s administration appealed to the Supreme Court in August over the ruling of a lower court in favour of the settlement. The Supreme Court has yet to rule on the appeal.
Reuters
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