Blood Giant Grifols Acquires $1.9 Billion Stake in Shanghai RAAS

(Bloomberg) -- Grifols SA agreed to pay about $1.9 billion for a stake in Shanghai RAAS Blood Products Co., gaining a major foothold in China’s booming blood-products market.

The Barcelona-based company will acquire a 26 percent stake in Shanghai RAAS in a noncash deal, making it the second-largest shareholder in the Chinese producer, Grifols said in a regulatory filing Thursday.

Demand is climbing in China for human serum albumin, a blood-plasma derivative used to treat liver diseases, with supplies limited by strict rules governing blood donation. As part of the deal, Grifols, the world’s largest manufacturer of immunoglobulin, will provide technology and know-how to Shanghai RAAS, as well as engineering services in exchange for fees. The Chinese company will also become Grifols’s exclusive distributor of plasma-derived products and transfusional diagnostic solutions in China.

In the transaction, Grifols will give Shanghai RAAS 45 percent of the economic rights and 40 percent of the voting rights of its U.S. subsidiary, called Grifols Diagnostic Solutions. The unit is valued at $4.3 billion, so the stake is worth about $1.9 billion.

As part of its push to both diversify away from the U.S. and grow in China, Grifols last year sealed a deal with Boya Bio-Pharmaceutical Group Co., known as Jiangxi Boya, to build and manage plasma collection centers.

Grifols’s Australian rival CSL Ltd. paid $352 million in 2017 for a majority stake in Wuhan Zhongyuan Ruide Biological Products Co., which operates plasma collection centers. CSL acquired the rest of the company in June for a further $102 million.

To contact the reporter on this story: Rodrigo Orihuela in Madrid at rorihuela@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John J. Edwards III, John Lauerman

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