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news.Chinese biotech firm American Oriental Bioengineering has signed a letter of intent to acquire Heilongjiang Qitai Pharmaceutical Limited, a leading Chinese pharmaceuticals distributor.
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American Oriental Bioengineering (AOBO) entered into a letter of intent with Heilongjiang Qitai Pharmaceutical Limited (HQPL) on May 1, 2005 to record AOBO’s intention to acquire HQPL. AOBO has planned to use $4 million to acquire approximately $4.5 million worth of HQPL’s net assets, including a pharmaceutical wholesale and retail network that covers the entire country of China and an HQPL pharmaceutical retail distribution license.
The deal also includes a major Chinese herbal and medicinal material wholesale exchange that is GSP (good sales practice) certified as well as certified by the Chinese government.
“AOBO’s acquisition of HQPL will enable AOBO to penetrate the wholesale and retail pharmaceutical market,” explained Tony (Shujun) Liu, CEO. “This helps the company achieve one of its long- term goals to build a distribution network for its products.”
“For the past five years,” Liu continued, “the Chinese government has been implementing GMP certification, closing nearly one- third of over 4,000 pharmaceutical manufacturers, implementing GSP certification and closing nearly half of over 20,000 pharmaceutical wholesaler and retailers. In this context, AOBO’s acquisition of HQPL is strategically significant.”