Baker & McKenzie, Conyers Dill & Pearman, Walkers, Hogan Lovells, Sheppard, Mullin, Richter & Hampton and Thorp Alberga have all played a role in advising on the joint acquisition of Tongjitang Chinese Medical Company in a transaction that “opens the door for Cayman-incorporated companies that may be seeking a more flexible procedure for US delisting and going private.”

A trio of companies, Hanmax Investment, Fosun Industrial Co and Tonsun International, a Cayman Islands exempt company, have acquired all outstanding shares of Tonjitang – a leading specialty pharmaceutical company focussing on the development, manufacturing, marketing and selling of modernised tranditional Chinese medicines in China. As a result of the acquisition, Tonjitang became a wholly-owned subsidiary of Hanmax and Fosun.

Post-merger, Tongjitang will continue its operations as a privately-held company owned solely by Hanmax and Fosun. It subsequently will de-list its US depositary shares from the NYSE.

The Baker & McKenzie team was led by Beijing-based securities partner Scott Clemens and involved a multi-jurisdictional team of lawyers based in Beijing, Hong Kong and New York. “As the first US-listed company going private 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 de-listing and [are] going private,” Clemens said. Clemens also co-heads the firm’s US securities practice.

Acting for the consortium of buyers, Conyers Dill & Pearman David Lamb said: "The TCM privatisation is a landmark deal as it was the first privatisation of a Cayman company listed on a U.S. exchange to use the merger provisions in the Companies Law which were only introduced in 2009. There are numerous benefits to using this structure - this include a lower approval threshold and avoiding the court process required by a traditional scheme of arrangement. We are currently instructed on the buy side in many such deals and there is no reason why companies listed on other exchanges should not consider a similar structure, including those listed on HKEx."

Walkers acted in the capacity of Cayman counsel to the lender CITIC Ka Wah Bank with the team led by partner Arwel Lewis.

Other recent pharmaceutical acquisitions in Asia also include the US$180m acquisition of of a company engaged in marketing, promotion and sale of prescription pharmaceutical products manufactured by domestic pharmaceutical companies in the PRC by Hong Kong-listed China Medical System Holdings.

The Hong Kong office of Ashurst advised the acquirer CMS. The Ashurst team advising CMS on the acquisition was led by Hong Kong corporate partner Lina Lee. The team also advised CMS on its migration of listing from London AIM to Hong Kong in 2010.

Hogan Lovells advised CITIC Bank International as lender on Hong Kong law, NYSE regulatory issues and PRC matters. “There are a number of potential transactions out there involving structures of this nature and I am pleased that this deal as shown that such transactions are bankable in the current market," Hogan Lovells’ lead partner Gary Hamp said. ALB

Other related stories:

• Maples Cayman MP moves to HK to co-head office (15 Dec 2010)
• Sinopharm IPO: Just what the doctor prescribed (25 Sep 2009)
• PRC firms break out in M&A league tables (14 July 2010)