The country’s Foreign Investment Review Board (FIRB) has said the Australian government has no objections to the deal that will see SIIC Medical Science and Technology (Group) Limited, a 100% subsidiary of Shanghai Pharmaceuticals Holdings, and PV Zeus Limited, a 100% subsidiary of Primavera Capital Fund, acquire the company.
Vitaco also announced that its prospective new owners have received approval from the State-owned Assets Supervision and Administration Commission of the Shanghai Municipal Government to implement the takeover scheme.
“The process of satisfying the remainder of the conditions in order for the scheme to be implemented is underway and satisfaction of such conditions will be announced to the ASX in due course,” Vitaco said in a statement.
The scheme remains subject to a number of customary conditions including the approval of Vitaco’s shareholders and the Federal Court of Australia, as well as approval from the New Zealand Overseas Investment Office.
In August we reported that the deal, valued at US$239m, had been recommended by Vitaco’s directors.
Volatile conditions
Vitaco’s news owners are paying the equivalent US$1.71 per share, a 28% premium to their closing price before the deal was announced.
At that time, shares in Vitaco, which owns brands such as Nutra-Life, Wagner and Abundant Earth, had dipped by 40% from their peak of US$2.46 last November, in the month after it listed.
Vitaco's chairman Greg Richards said ongoing volatile macroeconomic conditions and regulatory uncertainty in China meant the deal was in the best interests of the company.
Shanghai Pharma said in a statement it would acquire 60% stake in the firm, with Primavera taking the remaining 40%.
The former was originally interested in buying Swisse Wellness last year, but lost out to Hong Kong-listed Biostime, which paid $1.67 for the Australian brand.
This is one of several high-profile deals that have seen Australian supplement companies snapped up by Chinese outfits.
That trend is now spreading globally. Just last week it was revealed that GNC was attracting interest from China too.