Minsheng Sanofi high-profile break-up, exclusive analysis of joint venture drug company divorce tide

Medicine Network January 23rd, another Sino-foreign joint venture pharmaceutical company divorced, this time Sanofi and Minsheng Pharmaceuticals! This is the second "divorce" between Sanofi and Minsheng Pharmaceuticals, the two sides more than 20 years of separation, but also the history of China's pharmaceutical industry joint ventureOn January 11, 2017, sanofi, a foreign-funded pharmaceutical company, and its old partner, Hangzhou Minsheng Pharmaceuticals, formally signed an equity transfer agreement, and Minsheng Pharmaceuticals will acquire all 60% of the shares held by Sanofi Hangzhou Sanofi Minsheng Health Pharmaceutical Co., LtdAfter the closing of the equity transfer, the original joint venture will be wholly owned by Minsheng Pharmaceuticals and will be fully responsiblethe joint venture was formed in November 2010 by Minsheng Pharmaceuticals and Sanofi to produce 21 gold-based products such as VitaAfter more than 6 years, still failed to resist the "seven-year itch", and finally ended up breaking upin fact, this is the second "divorce" between Sanofi and Minsheng Pharmaceuticals, the two sides more than 20 years of separation, but also China'spharmaceuticalindustry in the history of joint venturesIt is gratifying that the break-up of the two sides appear quite high-profile, but also held a special signing ceremony1
, "second marriage" history
why is the second divorce? In fact, anyone who knows the history of foreign investment in China's pharmaceutical industry knows that Theof Sino-foreign joint ventures in pharmaceuticalhas made great progress in China since the 1980s and has become an important force for foreign investment in ChinaSanofi's past marriage series with Minsheng Pharmaceuticals dates back to the 1990s1995, Sanofi Group of France and Hangzhou Minsheng Pharmaceuticalco jointly invested in the establishment of the first Sino-French joint venture pharmaceutical enterprise - Hangzhou Sanofi Minsheng Pharmaceutical Co., Ltd., its headquarters in Shanghai, the production base is located in Hangzhou, the production base of Sanofi and Minsheng products after the , the company has changed its name and equity, such as in 1999, with the merger of Sanofi and Sandraburg Group, the joint venture changed its name to Hangzhou Sanofi Sandraburg Minsheng Pharmaceutical Co., Ltd., after several years of rapid development, the successful introduction of Dalong, Kride, Quickbilin, Debarkin, Amberville, Bollevi, Lessadin and other products, once became the fastest growing joint venture in china's pharmaceutical market According to public information, Sanofi Sandra Fort Minsheng ranked in the top 10 leading joint ventures in the Hospital market in 2006 with a 4.7% hospital market share In 2004, with the successful acquisition of Avante by Sanofi-San drae, the joint venture was renamed Hangzhou Sanofi Anvante Minsheng Pharmaceutical Co., Ltd with the acceleration of China's medical reform process, affecting the development of the entire pharmaceutical industry, drug price reform, prescription management norms, drug classification management and tax system reform, etc continue to trigger the structural adjustment of the drug market Joint venture pharmaceutical companies also face the impact of domestic institutions and policies How to face the challenge is the joint venture pharmaceutical enterprises "localization" process must face In August 2009, the name, equity and personnel of Sanofi Anvante Minsheng Pharmaceutical Co., Ltd in Hangzhou changed significantly The name of the enterprise was changed to Sanofi Anvante (Hangzhou) Pharmaceutical Co., Ltd., Minsheng Pharmaceuticals disappeared from the company's shareholder structure, and Yu Fujiang was no longer vice chairman The first marriage ended here surprisingly, just a year later, the two sides are holding hands again At the time, China had become the world's second-largest over-the-counter drug market, and Sanofi-Avante's aim was clear to expand its global presence in China's market In November 2010, Sanofi-Avante Group of France and Minsheng Pharmaceuticals, a joint venture, was established as Sanofi-Avant's strategic platform for Entering China's OTC market according to data, the joint venture mainly produces vitamin and mineral products, is the largest category in China's over-the-counter drug market In particular, Minsheng Pharmaceuticals" "21 Gold Vita", after the listing of the "Chinese Pharmacopoeia" as a multi-dimensional element al-product quality standards, but also the first china to obtain a well-known trademark of multi-dimensional elemental products industry analysis, Sanofi again choose minnows pharmaceutical industry, not only because the two sides in the past cooperation has been understood and honed, but also look at the people's livelihood pharmaceutical industry "21 gold viita" brand strength, the product can be said to be the two sides of the lead-up months old Unfortunately, the good times are not long, a long time must be divided, and now both sides chose to high-profile announcement of the break-up 2
, the plight of joint ventures
since the 1980s, Chinese and foreign enterprises set up joint venture pharmaceutical enterprises have been roaring, several times through the wind and rain, there are break-ups, but also the former servants continue to explore the way of joint ventures Combed down, the vast majority have ended up breaking up take the first sound of Mershadong as an example, in 2012 the first sound of pharmaceutical industry and Mershadon joint venture set up the first sound Ofadong (Shanghai) Pharmaceutical Co , Ltd , less than three years, Mersadong announced the withdrawal, once as a domestic and foreign pharmaceutical companies strong and strong joint venture typical and popular first sound Ofshadon, in 2015 a shot in two another typical representative of Haizheng Pfizer, which was co-financed in 2012 by Pfizer, the world's leading pharmaceutical company, and Haizheng Pharmaceuticals Over the past few years, instead of achieving the effect of 1 plus 2, the news of a break-up broke out in 2016, and although it is not yet conclusive, the two sides have indeed been in talks on the matter love is easy, marriage is not easy! There are many factors that cannot be avoided and difficult to coordinate on the one hand, the difference between Chinese and foreign corporate culture and management philosophy is undoubtedly a big gap between the two sides on the other hand, the joint venture's vision and future development goals may be the most difficult mountain for Sino-foreign joint ventures to get around In the past, the cooperation between foreign pharmaceutical companies and local Chinese enterprises, all of which did not start with a beautiful vision, but really went up but there are many variables Initially everyone's vision may be consistent or coordinated, but with time and the company's specific management process changes, the differences between the two sides will inevitably appear, over time it will be difficult to coordinate at the same time, the ability to control future risks is also important for the joint venture From the past joint venture break-up cases, equity split, personnel changes and sudden events are the risk points affecting the future development of the joint venture the division of equity interests Industry analysis, in general, the more even the division of equity, the more decentralized the voice, the greater the risk of breaking up Such as Mr Mershadong joint venture by MersaDong holding 51%, the first sound pharmaceutical accounted for 49%, in the input products, Mersadong company invested 4 drugs , first sound pharmaceutical investment in 2 drugs In the case of Haizheng Pfizer, of the total investment of $295 million, Haizheng Pharmaceuticals, Haizheng Hangzhou And Pfizer Luxembourg each accounted for 5%, 46% and 49% of the registered capital of the joint venture personnel changes are important factors that cause internal management problems Zhang Yejun, who had worked in Mershadon for 12 years, was appointed chief executive officer at the beginning of the first-ever Mershadeast joint venture He initially had high hopes for opening up the grass-roots market, but only a year after the joint venture was formed, he offered to leave and was replaced by someone else, and the previous plan was not moving as expected, which became an important factor in sparking the conflict Similarly, Haizheng Pfizer also after the departure of its chief executive Xiao Weihong, management changes, after the break-up rumors of personnel issues were once questioned by the Securities and Exchange Commission in addition, sudden events such as policy changes can also be the trigger for break-ups The impact of policy changes may be beneficial, may also restrict the development of the company, in the face of uncertainties, how to avoid risks of joint venture pharmaceutical companies is also an important aspect of thinking it is worth noting that before announcing its break-up with Minsheng Pharmaceuticals, Sunstone China and China Resources, series of subsidiaries of Sanofi, announced at the end of 2016 that they would establish a joint venture in China to establish a joint venture with China to focus on the production of pediatric and gynaecological over-the-counter prescription drug products China Resources 39 will own 70 per cent of the joint venture, while Sunstone China will hold a 30 per cent stake in the joint venture After experience and lessons, the new joint venture has begun, and it remains to be seen how the next will be!