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China's Harbin Pharma to buy stake in U.S. health retailer GNC

From Reuters - February 13, 2018

HONG KONG (Reuters) - Chinas state-controlled drugmaker Harbin Pharmaceutical Group Holding Co (600664.SS) will buy an about 40 percent stake in U.S. nutritional supplements retailer GNC Holdings Inc (GNC.N) for $300 million and are in talks for a joint venture in China, the companies said.

GNC has agreed to sell 299,950 convertible preferred shares to Harbin Pharma at $1,000 apiece, the U.S. firm said in a filing to the Securities and Exchange Commission on Tuesday.

The two companies are also looking to set up a China joint venture, which would be 65 percent owned by Harbin Pharma.

The Chinese firm, which will become the largest shareholder in GNC, will have exclusive rights to use the U.S. firms trademarks and manufacture and distribute its products in mainland China, and GNC will receive royalties on all products sold by the joint venture, the companies said in a statement on Tuesday. [nPnJSmw8a]

Reuters reported in September that GNC was seeking a partner to boost sales in China as it battles weak revenues and a slide in share price. [nL4N1LM1ZD]

GNCs stock had halved in value over the last 12 months, as of its close on Monday. The stock surged 18 percent on Tuesday on the New York Stock Exchange.

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