Grifols shares soar after sale of 20% of Shanghai RAAS for $1.8 billion

By Inti Landauro and Roxanne Liu

MADRID/BEIJING (Reuters) -Shares in Spanish pharma group Grifols soared on Friday after it agreed to sell a 20% stake in China’s Shanghai RAAS Blood Products for about $1.8 billion to Chinese home appliance company Haier Group Corporation.

Grifols, which has been Shanghai RAAS’s main shareholder, will retain a stake of 6.58% in the company. It intends to use the proceeds of the sale to reduce its debt, it said in a statement.

“With this transaction, Grifols is able to keep its presence in China, maintains its commercial agreements with SRAAS in place, and at the same time, complies with its commitment to deleverage,” the Spanish company said on Friday.

Grifols said in June it intended to reduce its stake in Shanghai RAAS for a price of around $1.5 billion.

Grifols shares were up 9% following the news, the biggest gainer on the STOXX 600 index.

The company suffered at the start of the COVID-19 pandemic when plasma collection was restricted, with its shares falling by two-thirds from early 2020 levels.

It has since sought to reassure investors with cost-cutting measures and a leadership change, boosting its shares by 44% so far this year.

Grifols agreed to sell each share of Shanghai RAAS at 9.405 Chinese yuan ($1.32), about 18% above Friday’s closing price.

Haier Group, based in the Chinese city of Qingdao, or its designated partner, will become the controlling shareholder in Shanghai RAAS after the transaction, which is expected to close in the first half of 2024 pending regulatory approvals.

It will also acquire the voting rights from Grifols’ remaining stake, though the Spanish company will keep a seat on the board.

The deal will help Haier’s healthcare brand Yingkang Life, which focuses on high-end research equipment, medical devices and healthcare services, to enhance its blood-related business, Haier said in a separate statement.

Nomura served as Grifols’ leading financial advisor on the deal, while CICC and PwC advised Haier.

($1 = 7.1104 Chinese yuan renminbi)

(Reporting by Inti Landauro and Roxanne Liu; editing by Jason Neely, Kirsten Donovan)