GSK to acquire Nanjing MeiRui Pharmaceuticals in China

The $70 million cash acquisition is part of Glaxo’s emerging markets push

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LONDON—British pharma giant GlaxoSmithKline plc (GSK) announced Dec. 7 it has entered into an agreement to acquire Nanjing MeiRui Pharma Co. (MeiRui) for a cash consideration of approximately $70 million, as part of a strategic plan to further expand GSK's presence in China, which the company notes is one of the fastest-growing and most significant of the emerging markets. The deal is expected to close by the end of this year, subject to regulatory approval.

GSK shares gained 0.5 percent in early morning trading in London on word of the acquisition.

Under the announced plans by GSK, 90 percent of the share capital of MeiRui is to be acquired from Pagoda Pharmaceuticals Limited and the remaining 10 percent from Allergon AB. GSK calls MeiRui "a leading Chinese pharmaceutical business with a strong portfolio of urology and allergy products" which includes Prostat for benign prostatic hyperplasia and Sheniting for overactive bladder syndrome. GSK will gain access to this portfolio of products, as well as MeiRui's established sales and marketing platform and a manufacturing facility in Nanjing City, Jiangsu Province, China.

According to Norwalk, Conn.-based market research company IMS Health Inc. sales of pharmaceuticals in emerging markets will likely expand as much as 17 percent between now and the end of 2014, whereas similar growth in developed markets is expected to be as much as 6 percent. Furthermore, IMS predicts that China will likely be the world's second-largest market by 2015, with sales expected to grow 25 percent next year to $50 billion.

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