Shanghai RAAS Announces $5 Billion Deal to Acquire GDS, Global Leader in Blood Testing

Recently, VCBeat (WeChat Official Account: vcbeat) learned that Shanghai RAAS Blood Products, which had been suspended from trading for nearly six months for restructuring, announced the target of its restructuring on the evening of November 22. The company declared its intention to issue shares to the international blood products giant Grifols (Spain) in exchange for 100% equity interest in its wholly-owned subsidiary, Grifols Diagnostic Solutions (GDS), the absolute global leader in blood testing. Additionally, Grifols will be introduced as a strategic shareholder of Shanghai RAAS. The transaction is valued at approximately USD 5 billion.

Meanwhile, Shanghai RAAS will also acquire Biotest, a German global blood products company with a 70-year history and a complete industry chain, for approximately €589 million. In addition, Shanghai RAAS plans to temporarily abandon its previous intention to acquire the UK-based Bio Products Laboratory Holdings Limited (BPL).

The two transactions involving GDS and Biotest, valued at nearly RMB 40 billion, would mark the largest pharmaceutical M&A deal in China’s history if successfully completed by Shanghai RAAS.

Shanghai RAAS Blood Products Co., Ltd. is an enterprise primarily dedicated to the research and development, production, and sales of blood products. The company is currently one of the largest blood products manufacturers in China and among the domestic peers with the most comprehensive portfolio of coagulation factor products. In June 2008, Shanghai RAAS was listed on the Shenzhen Stock Exchange.

Image from the official website of Shanghai RAAS Blood Products Co., Ltd.

In February this year, the company announced that Shanghai RAAS and its controlling shareholder, Creative Sky (Kerui Tiancheng), along with its subsidiary, Tiancheng International Investment, were jointly planning a major asset restructuring. Due to uncertainties surrounding the matter, and in order to protect investors' interests and avoid significant impact on the company's stock price, the company applied to the Shenzhen Stock Exchange for a trading suspension. As a result, the company's shares have been suspended from trading since the market opening on February 23, 2018.

At that time, Shanghai RAAS committed to keeping the trading suspension period to no more than one month. Following the suspension, Shanghai RAAS initiated acquisition planning for BPL and Biotest, with a preliminary valuation range of RMB 13.5 billion to RMB 16.5 billion.

However, in the latest update on the restructuring progress, BPL, the world’s largest third-party plasma supplier, is no longer included as a target asset. Shanghai RAAS explained that all plasma collection centers held by BPL are located in the United States. The review by the Committee on Foreign Investment in the United States (CFIUS), for which BPL had filed, has yet to reach a clear conclusion, and there is significant uncertainty regarding its approval. Therefore, the decision was made to abandon the acquisition of BPL.

Instead, it is GDS, the global leader in the blood products industry based in Spain. Established in 2013, GDS specializes in blood testing through the production of immunoassay instruments and reagents. Its core business includes nucleic acid testing (NAT), immunological antigen detection, and blood typing for transfusion medicine.

This transaction has drawn widespread attention across the industry. If Shanghai RAAS successfully acquires GDS and Biotest, two world-renowned plasma-derived therapy companies, its existing product portfolio and profit margins will be significantly expanded.