Rising incomes and a growing middle class in China is boosting investment into healthcare, pharmacy and self-care. This was recently highlighted by the announcement that a Chinese investor group will be acquiring the condom division of Ansell Ltd, the world’s second-largest condom maker, for USD 600 million. The amount represents 16 times the division’s earnings from 2016.
China’s Humanwell Healthcare Group Co Ltd and CITIC Capital China Partners joined forces to buy the division in an all-cash deal, from which Ansell Ltd expects to receive USD 529 million in after-tax net proceeds.
Shares in Ansell Ltd rose 4 percent in the wake of the announcement, representing the company’s biggest daily gain in half a year. Anton Tagliaferro, Investment Director at the biggest holder of Ansell stock, commented that “they’ve sold what was a smallish part of their overall business for a very good price, we think it’s a good move.” Regulatory approval for the transaction is still pending, but will most likely be granted by the end of September 2017.
A 2016 Transparency Market Research report predicted that the condom market in China will grow 12 percent annually between 2016 and 2024. This will take the overall value of the market from around USD 1.8 billion to over USD 5 billion.
In China, foreign intimate healthcare products tend to have more credibility than their local counterparts due to scandals involving Chinese products. The perception of higher quality when it comes to foreign brands is likely to be a factor in future investment into overseas healthcare opportunities by Chinese entities.
On 30th August 2017, Naseba will be hosting the healthcare investor meeting in Shanghai, China. At the meeting, pre-screened Chinese investors will be introduced to pre-qualified Chinese healthcare investment opportunities.
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