Cardinal Health has inked a $1.2 billion deal to offload its Cardinal Health China business to Shanghai Pharmaceuticals. The transaction is slated to close by the end of Cardinal’s fiscal year in June.
The sale includes Cardinal’s pharma and medical products distribution units in China, according to a statement. It does not affect the company’s other businesses in China, including Cordis, its Patient Recovery business recently acquired from Medtronic and its medical sourcing team.
“Cardinal Health expects that employees, infrastructure and various systems and processes that support this business will move to Shanghai Pharma upon closing of the transaction,” the company said in the statement.
"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,” said Shanghai Pharma Chairman Zhou Jun. “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."
The announcement comes a week after Cardinal Health posted a dip in profits for the first quarter of fiscal 2018. Its medical products unit ticked up slightly, but its pharma division—which sells radiopharmaceuticals, plasma products and other drugs—saw a 13% drop in profits year over year.