China Resources Holdings Co. is considering buying a minority stake in Shanghai RAAS Blood Products Co. from Grifols SA, according to people familiar with the matter.
(Bloomberg) — China Resources Holdings Co. is considering buying a minority stake in Shanghai RAAS Blood Products Co. from Grifols SA, according to people familiar with the matter.
The companies are in talks about a potential transaction that would help the Spanish blood plasma firm cut its debt load, the people said, asking not to be identified because the matter is private. Negotiations are ongoing and could still fall apart, the people said. Other health-care groups and investment firms have shown interest in acquiring the stake, they added.
Shares of Shanghai RAAS rose as much as 3.4% on Friday in their biggest advance in more than two weeks, following the Bloomberg News report. Shares of Grifols reversed earlier losses and touched the highest intraday level in three weeks on Thursday. The stock was down almost 1% at the close.
Representatives for state-owned China Resources and Shanghai RAAS didn’t immediately respond to requests for comment. A spokesperson for Grifols declined to comment.
Grifols, which owns a 26% stake in Shanghai RAAS, said last month it is planning major changes to the shareholding structure of the Chinese firm. Barcelona-based Grifols expects to book $1.5 billion if a deal goes through, and to remain a significant shareholder of the Chinese blood products firm.
Cutting its debt pile has become a priority for Grifols. Executive Chairman Thomas Glanzmann in May took over more powers from members of the founding family to help shore up investor confidence in its debt-cutting credentials, and to focus on delivering results. Shares were shaken by the sudden resignation of its former chairman in February, just days after unveiling a €400 million ($435 million) efficiency plan.
Grifols agreed to acquire its Shanghai RAAS stake in 2019 in an equity swap transaction worth about $1.9 billion. After the deal, which closed in 2020, Grifols became the largest shareholder in the Chinese blood-products producer.
–With assistance from Clara Hernanz Lizarraga, Dong Cao and Shirley Zhao.
(Updates with share move in third paragraph.)
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