November 21, 2007

DSM awaits approval for acquisition of NCPC stake

Jiang Weiming, President of DSM China, said on Monday (Nov 19) that the Dutch firm is presently awaiting the approval of China's National Development and Reform Commission on its proposed acquisition of a stake in North China Pharmaceutical Group Corporation (NCPC).

Commenting on the delay of the acquisition exercise, Jiang said that while both companies had signed an agreement in 2004 for the acquisition, work process related to regulatory compliance had only begun early this year with the various procedures required the approval of many internal and external parties.

According to the agreement, DSM would invest US$25 million to acquire a minority stake in the shares of NCPC at RMB3.55 per share. In addition, DSM will obtain a 49-percent stake in the two joint ventures for nutritional products and anti-infectives.

With the recent share price of NCPC edging closer to RMB7.00 per share, DSM may end up acquiring a smaller stake. Responding to this, Jiang said he was perturbed, adding that DSM looks forward to continued collaboration with NCPC and will remain active in seeking partnerships with other companies in the China market.

RMB1=US$0.1347 (Nov 21)