business

China's Creat Edges Closer to U.S. Deal on Biotest

Updated on
  • Companies face CFIUS’s Saturday deadline on $1.4 billion deal
  • Beijing group is likely to cede control of Biotest’s U.S. unit

China’s Creat Group Corp. is making progress in securing approval from the U.S. government for its proposed acquisition of German blood plasma supplier Biotest AG as a deadline looms, according to people familiar with the matter.

Creat has offered to cede control of U.S. operations in order to proceed with the 1.2 billion euro ($1.46 billion) takeover, the people said, asking not to be identified as the talks are confidential. The companies, which face a Saturday deadline to appease the Committee on Foreign Investment in the U.S., or CFIUS, are in final negotiations with the regulator regarding selling or separating the business, the people said. Shares of Biotest surged by a record.

CFIUS is leaning toward approving the deal and an announcement on the agreed steps may come as early as this week, the people said, though last-minute hurdles could still derail the discussions.

Representatives for Creat and Biotest declined to comment. CFIUS doesn’t comment on its work and won’t confirm or deny reviews it’s conducting.

Biotest’s stock jumped by as much as 22 percent, the biggest one-day climb in its history, to 26.40 euros in German trading. The stock had declined almost 21 percent since CFIUS’s concerns were reported by Bloomberg News in November.

Creat, a Beijing-based investment group, said in March that it planned to acquire the Dreieich, Germany-based company. Biotest’s shareholders accepted the offer in June, though completion remained subject to regulatory approval.

The deal hit a snag when CFIUS raised issues about Creat’s access to the personal data of blood plasma donors and receivers, people with knowledge of the matter said in November. The German company had created a U.S. subsidiary, Biotest Pharmaceuticals Corp., in Florida in 2007, according to its website. It has plasma centers around the U.S.

News of the regulatory concerns led to a rout in Biotest shares on speculation that the transaction would fall apart like several other Chinese deals, which last year ran into objections from CFIUS, an interagency panel that reviews foreign acquisitions for national security risks. The panel is led by the Treasury Department and includes officials from the Defense, State and Justice departments among others.

(Updates with stock from second paragraph.)
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