HONG KONG, Nov 2 (Reuters) - China’s Laobaixing and Yixintang Pharmaceutical Group Co Ltd are in advanced talks to create the country’s biggest drugstore chain via a share swap, three people familiar with the matter said.
Laobaixing’s founders, Xie Zilong and Chen Xiulan, who hold 33% of their company, are expected to have a bigger stake in the merged firm than Yixintang’s founder Ruan Hongxian who owns 31% of his company, said two of the people.
Shanghai-listed Laobaixing, formally known as LBX Pharmacy Chain Joint Stock Company, had a market value of $4.4 billion as of Friday while Shenzhen-listed Yixintang was valued at $3.5 billion.
The talks have been ongoing for more than three months, the two people said. The firms are aiming to finalise and announce the deal in the coming days, one person said.
The sources declined to be identified as the talks were not public. Laobaixing, Yixintang did not immediately respond to requests for comment.
Laobaixing, backed by tech giant Tencent and private equity firms FountainVest Partners and Primavera Capital, had 6.7 billion yuan ($1 billion) in revenue for the first half, while Yixintang had 6 billion yuan, filings show.
Together they exceeded the 8.6 billion yuan in first-half revenue for current industry leader, state-backed Sinopharm Holding Guoda Drugstores. ($1 = 6.6888 Chinese yuan) (Reporting by Julie Zhu; Editing by Edwina Gibbs)
Our Standards: The Thomson Reuters Trust Principles.