The deal covers Dublin, Ohio-based Cardinal’s pharmaceutical operations and medical distribution business in the People’s Republic, but does not include other assets there such as Cordis, the patient recovery business for which it paid Medtronic (NYSE:MDT) $6 billion or its medical sourcing team.
“It has been an honor to serve the people of China through our distribution business for the past seven years,” chairman & CEO George Barrett said in prepared remarks. “We recognize that significant scale is required to be a market leader in China and with that in mind, we are delighted to announce that Shanghai Pharma has agreed to purchase our distribution business in China. We are very proud of the work that our colleagues have done and their accomplishments have allowed us to build a business that is now poised for further growth under its new owners. On behalf of all of us at Cardinal Health, I want to thank the team for their continued commitment, hard work and dedication to our customers and the patients they serve.”
“Amid the national healthcare reform, the acquisition of the Cardinal Health China business will further strengthen our leadership in the distribution and retail pharmacy network, and expedite our transformation to become a modern global healthcare provider. This will also facilitate the growth of our pharmaceutical manufacturing business, enabling us to play a significant role in the Government’s ‘Healthy China’ initiative,” added Shanghai Pharma chairman Zhou Jun.
The deal is expected to close by the end of Cardinal Health’s fiscal year in September 2018, the company said, noting that chairman Eric Zwisler retired effective immediately as part of the divestment.
“On behalf of everyone at Cardinal Health, I’d like to thank Eric for many years of leadership and dedication to our organization. We wish him well in his future endeavors,” said Barrett, who is slated to step down himself in January in a planned succession.