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DSM, Huabei Pharmaceutical Group Finalize Deal On Joint Venture, But Not On Pricing Decision

This article was originally published in PharmAsia News

Executive Summary

After years of negotiation, DSM and Huabei Pharmaceutical Group finally reached an agreement for their joint venture, albeit with compromises. DSM's stake in Huabei has been reduced from the expected 25 percent to 9.77 percent. Informed sources disclosed that State-owned Assets Supervision and Administration Commission of Hebei province did not want Huabei to transfer shares exceeding 10 percent. Analysts doubt if DSM would still help Huabei on its technology upgrade and overseas distribution with the significantly decreased stake. The Chinese firm may become relegated to being DSM's pharmaceutical raw material supplier and lose the profit margin of its current fixed overseas price status. This issue, coupled with the rising yuan against dollar, will represent a bug-bear for the two partners. (Click here for more - Chinese language)
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