This is not just an equity stake investment by Sumitomo Corp (SC). The Japs are prepared to get their hands dirty - they will have 3 directors on board and also have the Chairman seat. From the press release, SC have great plans for C&O - even stating specific growth targets of doubling revenue in 5 years - from Jap culture that is almost a certainty cast in stone - if not the CEO have to do a Seppuku (切腹, "stomach-cutting") when targets are not met!!!! hahaahha!
Most probably this is just a stepping stone and foothold by the Jap Conglomerate. Interesting development.
At least one can be assured that a full Due diligence has been conducted by M&A team and financial advisor. That C&O Pharm's bank account has real $$..
Press release by Sumitomo: Investment in a Singapore Stock Market-listed Chinese Pharmaceuticals Company
Marks a Fully Fledged Advance Into the China Pharmaceuticals MarketSumitomo Corporation (Chuo-ku, Tokyo; President and CEO: Susumu Kato; hereinafter, Sumitomo) has agreed to aquire from the major stockholder Leo Star Development Limited (the English territory of the Virgin Islands; hereinafter, Leo Star) a 29% share in a Singapore Stock Market-listed C&O Pharmaceutical Technology Holdings Ltd. (Group)(the English colony of Bermuda; Chairman: Gao Bin; hereinafter, C&O). The result is that, after Leo Star, Sumitomo will become the second largest stockholder in C&O and
through them will mark its fully fledged advance into the mainland China pharmaceutical market.The future outlook for the rapidly expanding the China pharmaceutical market is expected to see growth of more than 15%. By 2020, the China Pharmaceutical market size is said to reach US$130 billion and exceed Japan, being the second largest after the U.S.. C&O is a pharmaceutical company based in China, which is involved in the R&D, manufacturing and sales of pharmaceuticals,
selling ethical drugs to 300,000 hospitals and pharmacies all over China. Sumitomo has long been active in the new drug licensing business.
Now through C&O, in addition to introducing new drugs from Japan,the U.S. and Europe into China's pharmaceutical market, Sumitomo will embark on pharmaceutical development on contract basis, utilizing C&O's R&D platform. Moreover, making use of Sumitomo's global supply chain, Sumitomo is thinking of providing C&O with highly competitive active pharmaceutical ingredients and to export C&O branded products to South East Asia market,
through which Sumitomo plans to double C&O's turnover to be 15 billion Yen within the 5-year range. With the capital participation this time, supplying high quality and safe pharmaceuticals to China through C&O, Sumitomo will contribute to enhancing the level of medical care in China, and maintaining/improving the health of people in China.
<C&O Company Details>
Official Name : C&O Pharmaceutical Technology (Holdings) Limited
Date of Establishment: 2003 (Listed in the Singapore Stock Exchange in 2005)
Address : Registered in Bermuda
Scope of Operations : R&D, manufacturing, importing and sales of pharmaceuticals
Annual turnover : Approx. 7 billion Yen
Press Release by C&O Pharma: Sumitomo Corp acquires 29% strategic stake in C&O Pharmaceutical for S$96 million
Sumitomo will become the second largest shareholder of C&OSINGAPORE – 1 December 2010 – Mainboard-listed C & O Pharmaceutical Technology (Holdings) Limited (“C&O†or “the Groupâ€) today announced that Sumitomo Corporation (“Sumitomoâ€), has entered into a sale and purchase agreement with Leo Star Development Limited, an investment holding company helmed by C&O’s Executive Chairman Mr Gao Bin, for a 29% stake in C&O for a consideration of S$96,187,000 or S$0.50 per share.
Sumitomo Corporation is one of the world’s largest integrated trading companies engaged in multifaceted business activities around the world with more than 25 domestic offices in Japan and
115 overseas offices spanning over 65 countries. In the financial year ended 31 March 2010, Sumitomo’s revenue totalled JPY2,884.2 billion (USD 31,013 million) and net income attributable to shareholders amounted to JPY155.2 billion (USD 1,669 million)1.
Its strategic investment in C&O signifies a vote of confidence in C&O’s integrated competencies and business prospects.Upon completion of the acquisition, Leo Star and
Mr. Gao together will own approximately 29.17% in C&O while Sumitomo will be the Group’s second largest substantial shareholder with 29% interest.
Committed to be actively involved in steering C&O’s growth both domestically and internationally, Sumitomo will nominate three executive directors to sit on C&O’s Board, who will replace three existing directors of C&O, and
one of whom will be designated as Chairman of the Board while Mr Gao will be redesignated as the Group’s Vice Chairman, and will continue to service the Group.Said Mr Gao, “Today, I am delighted to welcome Sumitomo to be our substantial shareholder. Our partnership with Sumitomo symbolises a new era for C&O. Undoubtedly, Sumitomo’s expertise in corporate management, global network and experience in developing international markets will further strengthen C&O’s core competiveness, and help to expand our business in the China healthcare market, as well as explore export markets in Southeast Asia.â€
“Coupled with our extensive distribution network and marketing experience in China, C&O will become a leading player in the China market, with an aim to deliver more quality products to consumers. I look forward to working closely with the Sumitomo team to achieve this goal.†Mr Gao concluded.
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