Baker & McKenzie Advises on the Management/Strategic Buyout of Tongjitang Chinese Medicines
Deal Announcement
19 April 2011
Hong Kong, China, 19 April 2011 – Baker & McKenzie acted as US legal advisor to Hanmax Investment Limited (“Hanmax”), Fosun Industrial Co. Ltd (“Fosun”) and Tonsun International Company Limited (“Tonsun”), a Cayman Islands exempted company all of the outstanding shares of which are owned by Hanmax and Fosun, in connection with their acquisition by way of merger of Tongjitang Chinese Medicines Company (“Tongjitang” or the “Company”), a leading specialty pharmaceutical company focusing on the development, manufacturing, marketing and selling of modernized traditional Chinese medicines in China. As a result of the acquisition, the Company became a wholly-owned subsidiary of Hanmax and Fosun. Hanmax is an affiliate of Mr. Xiaochun Wang, chairman of the board of directors and chief executive officer of the Company.
Under the terms of the merger agreement, each ordinary share of the Company issued and outstanding immediately prior to the effective time of the merger (other than the ordinary shares and ordinary shares represented by American Depositary Shares owned by Hanmax, Tonsun and Fosun) was cancelled in exchange for the right to receive $1.125 (or $4.50 per American Depositary Share) in cash without interest. The merger agreement was approved by the shareholders at the extraordinary general meeting held on 31 March 2011.
Post merger, Tongjitang will continue its operations as a privately held company owned solely by Hanmax and Fosun, and its American Depository Shares will no longer be listed on the NYSE.
The Baker & McKenzie team was led by US Securities Practice partner Scott Clemens and involved a multi-jurisdictional team of lawyers based in Beijing, Hong Kong and New York.
“As the first going private for a US-listed company under the Cayman Islands merger statute, this transaction opens the door for Cayman-incorporated companies that may be seeking a more flexible procedure for US delisting and going private,” Scott Clemens, co-Head of the Firm’s US Securities Practice and partner in the Firm’s Beijing office said.