Novartis to Acquire Stake in Zhejiang Tianyuan    

On November 4th, 2009 Novartis announced it has reached an agreement to acquire an 85% stake in the Chinese vaccines company Zhejiang Tianyuan Bio-Pharmaceutical Co., Ltd. (Tianyuan) as part of a strategic initiative to build a vaccines industry leader in China and expand the Novartis' limited presence in this fast-growing market segment. This proposed acquisition will require government and regulatory approvals in China.
   Tianyuan is a privately-owned vaccine company offering a range of marketed vaccine products in China and R&D projects focused on various preventable viral and bacterial diseases. Tianyuan has been delivering dynamic and profitable growth, having more than doubled its net sales to approximately US$25 million in 2008 compared to 2006. Tianyuan approximately 400 associates and an R&D/manufacturing site in Hangzhou (near Shanghai) of Zhejiang province.
   As part of the collaboration, the two companies will work together to expand Tianyuan's product portfolio and R&D pipeline through targeted investments in vaccines innovation, manufacturing technologies and commercial networks. This collaboration is also expected to facilitate the introduction of Novartis vaccines into China, where Novartis currently has a limited presence with an offering of vaccines against influenza and rabies.
   China is the world's third largest vaccines market, with annual industry sales of more than US$1 billion and expectations for sustained double-digit growth in the future given the government's commitment to improve access to quality healthcare.
Transaction terms
   Novartis has signed a definitive agreement with the shareholders of Zhejiang Tianyuan Bio-Pharmaceutical Co., Ltd., to acquire an 85% stake for approximately RMB850 million (US$125 million in cash). The transaction is subject to certain closing conditions, including receipt of government and regulatory approvals in China.