Cardinal Health to Sell its China Business

Cardinal Health has announced that it has signed a definitive agreement to sell its Cardinal Health China business to Shanghai Pharmaceuticals Holding Co. Ltd. for $1.2 billion. The transaction is expected to close by the end of Cardinal Health’s fiscal year, subject to closing conditions and regulatory clearances.
 
The sale includes Cardinal Health’s pharmaceutical and medical products distribution business in China. Cardinal Health expects that employees, infrastructure and various systems and processes that support this business will move to Shanghai Pharma upon closing of the transaction. The divestiture does not include Cardinal Health’s remaining businesses in China, including Cordis, its recently acquired Patient Recovery business, its medical sourcing team, or other functions.
 
“It has been an honor to serve the people of China through our distribution business for the past seven years,” said George Barrett, chairman and CEO of Cardinal Health. “We recognize that significant scale is required to be a market leader in China and with that in mind, we are delighted to announce that Shanghai Pharma has agreed to purchase our distribution business in China. We are very proud of the work that our colleagues have done and their accomplishments have allowed us to build a business that is now poised for further growth under its new owners. On behalf of all of us at Cardinal Health, I want to thank the team for their continued commitment, hard work and dedication to our customers and the patients they serve.”
 
Mr. Zhou Jun, chairman of Shanghai Pharma, said, “Amid the national healthcare reform, the acquisition of the Cardinal Health China business will further strengthen our leadership in the distribution and retail pharmacy network, and expedite our transformation to become a modern global healthcare provider. This will also facilitate the growth of our pharmaceutical manufacturing business, enabling us to play a significant role in the Government’s ‘Healthy China’ initiative.”
 
Cardinal Health and Shanghai Pharma look forward to continuing to collaborate and find new opportunities to explore ways to create mutual value both in the U.S. and China.
 
Cardinal Health also announced that Eric Zwisler, chairman of Cardinal Health China, will retire effective immediately as part of the sale. Barrett said, “On behalf of everyone at Cardinal Health, I’d like to thank Eric for many years of leadership and dedication to our organization. We wish him well in his future endeavors.”
 
Lazard served as Cardinal Health’s financial advisor on this transaction, and Jones Day and Jun He LLP, served as its legal advisors.