AstraZeneca has drawn up plans to break out its China business and list it separately in Hong Kong as a way to shelter the company against mounting geopolitical tensions.

The Anglo-Swedish drugmaker began discussing the idea with bankers several months ago and is among a growing number of multinational companies now considering that option, according to three people familiar with the talks.

A separation might not ultimately take place, the same people cautioned. One of the people said listing the entity in Shanghai was also possible.

The discussion shows the significant restructuring multinational corporations could be forced to undertake as they adapt to growing friction between China and the US and its allies.

Under the plans AstraZeneca, which is the UK’s biggest listed company by market value at £183bn, would carve off its operations in China into a separate legal entity but would retain control of the business.

The idea has been “on the table for a few years”, one adviser to AstraZeneca said, adding that it had been sidelined until recently amid a global downturn in biotech stocks.

“Every multinational with a strong China business” seems to have considered a similar move, one senior Asia-based banker said. “Even if it’s just the option to give you flexibility in the future, it’s worth thinking about.”

A person briefed on AstraZeneca’s plans said listing a separated unit in either Hong Kong or Shanghai could insulate it politically from any moves by China to crack down on foreign companies, by making it a more plausibly domestic Chinese business. It would also offer a separate source of capital.

They said the separate listing could also help investors in the remaining company reassure themselves that they had less exposure to China-related risk.

One consultant to pharmaceutical companies added that pursuing a domestic listing could help AstraZeneca court Beijing’s support for drug innovation and win faster approvals for therapies developed in China.

It would not be the first time the pharmaceutical group has pursued separate financing for its China operations. In 2017, AstraZeneca created a research and development joint venture with a Chinese fund. The venture, Dizal Pharmaceutical, was listed in Shanghai two years ago.

AstraZeneca said it did “not comment on rumours or speculations around future strategy or M&A”.

AstraZeneca is the largest overseas pharmaceutical company in China by sales, generating $1.6bn in the country in the first quarter. “China is more important to AstraZeneca than [to] other large pharmaceuticals,” said the consultant. It has been expanding its Chinese business, with recent approvals of drugs for cancer and one for a rare disease.

China is an attractive market for pharmaceutical companies because of its large and ageing population, which is increasingly suffering from diseases caused by smoking, pollution and westernised diets. The Chinese government has sped up approval processes for innovative treatments, trying to encourage drugmakers to expand beyond offering only their older or generic treatments in the country.

AstraZeneca has also said it is interested in doing deals with Chinese biotechs. After returning from a tour of the country, chief executive Pascal Soriot said in April the company had “no limitation” on buying Chinese businesses. Last month it signed a partnership worth up to $600mn with Shanghai-based LaNova Medicines, for the global licence for a possible cancer drug.

Michel Demaré, the company’s chair, told the Financial Times last month: “When you are a global company like AstraZeneca you have always to cope with geopolitical risk and you have to try to manage that without getting too involved.”

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