Narrative
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Project narrative
On March 29, 2017, Tiancheng International Investment Limited (TII), a Hong Kong-incorporated holding company and subsidiary of Chinese healthcare and pharmaceutical investment firm Creat Group Corporation Limited, via purchasing company Tiancheng (Germany) Pharmaceutical Holding AG — a Germany-incorporated special purpose vehicle (SPV) and wholly-owned subsidiary of Tiancheng International — made an offer to acquire all the shares of Biotest Aktiengesellschaft (AG) via a voluntary public takeover offer from its all of its shareholders, including OGEL GmbH, Kreissparkasse Biberach GmbH, J O Hambro Capital Management Limited, and LBBW Asset Management Investmentgesellschaft mbH, for a cash payment of €28.5 EUR per ordinary share and €19 EUR per preference share of Biotest, or approximately €940 million EUR, a 43% premium on the price that the shares were traded before the offer was announced. Biotest Aktiengesellschaft (AG) is a German pharmaceutical company that produces blood plasma products based in Dreieich, Hessen. The offer had a minimum acceptance threshold of 75% of ordinary shares and was subject to standard approvals from authorities, expected by the bidder to be delivered in the second half of 2017. The deadline for acceptance of the offer was May 18, 2017. On April 7, 2017, Tiancheng International and Biotest entered into a business combination agreement associated with the offer; Tiancheng acquired to keep Biotest's Dreiech headquarters, maintain Biotest's corporate name, brand, and product name, keep employment levels consistent with the current management's business plan, and adhere to existing collective bargaining agreements. Tiancheng did not plan changes in the employment of management of Biotest. On May 4, 2017, the Offshore Banking Department of China Merchants Bank Co., Ltd. entered into a €940 million EUR term loan facility agreement with a Tiancheng International Investment Limited to facilitate the offer for the acquisition of Biotest. This loan carried a maturity period of two years. The €940 million EUR financing commitment was subject to potential reduction following a contemplated equity injection by Creat Group. The Frankfurt Branch of the Industrial and Commercial Bank of China (ICBC) acted as fronting bank, issuing financial confirmation (letter of credit) required by the German Takeover Act, while China Merchants Bank provided all the financing. China Merchants Bank served as mandated lead arrangers, and all initial lenders were branches of China Merchants Bank. On May 1, 2017, the Federal Trade Commission (FTC) granted early termination notice for the acquisition. On May 4, 2017, U.S. authorities granted merger control approval. On May 17, 2017, the German Federal Financial Supervisory Authority issued approval. OGEL GmbH entered into an agreement with Tiancheng to irrevocably accept the offer and to tender its shares, 50.61% of all outstanding ordinary shares. On June 13, 2017, Kreissparkasse Biberach GmbH, Asset Management Arm tendered its 15.17% stake in Biotest for the offer. As of June 14, 2017, shareholders of 77.05% of Biotest's voting share capital (38.5% of total share capital) and 0.08 million preference shares (0.22% of total share capital) accepted the offer, successfully reach the minimum acceptance offer of 75% of outstanding shares. Creat launched an additional acceptance period in late June 2017. As of July 7, 2017, 44.94% of the total share capital of Biotest and 0.2 million preference shares (0.54% of share capital) accepted the offer. On August 22, 2017, Turkey's merger control authorities issued approval. At the time of the acquisition, Biotest owned eight plasma collection sites in Germany, five in Hungary, and 22 in the United States. Biotest's blood plasma products are used to treat blood coagulation disorders, auto-immune diseases, and immune deficiencies. Biotest's business interacts with blood plasma donors and receivers. Its U.S. subsidiary, Biotest Pharmaceuticals Corporation, operated its American plasma centers and maintained databases of personal identifying information (PII) and patient health information (PHI) for donors and receivers and other patients. The subsidiary's existence also triggered review from the Committee on Foreign Investment in the United States (CFIUS) for the acquisition. CFIUS raised national security concerns about Creat's access to the personal data of Americans via acquisition of Biotest, as part of broader concerns about Chinese entities gaining access to data on Americans, as well as broader technology concerns. CFIUS concerns were assessed by the media to be serious enough to block the acquisition. CFIUS did not issue approval for the acquisition after the initial 30-day review period or the following 45-day national security investigation period. In November 2017, Creat and Biotest withdrew the filing for the acquisition, reportedly intending to refile and give CFIUS additional time to consider the acquisition. However, instead Creat and Biotest restructure the transaction to avoid CFIUS review; in January 2018, Biotest AG announced the $286 million USD sale of Biotest US Corporation and its operating subsidiary Biotest Pharmaceuticals Corporation to Grifols Shared Services North America Inc., a subsidiary of Grifols S.A.; as these were Biotest's sole U.S. entity, CFIUS no longer had grounds to block the acquisition. Biotest AG placed the U.S. companies in a U.S. Trust pending completion of the sale, which was completed in August 2018. On January 19, 2018, Biotest announced that foreign trade approval for the acquisition had been granted by CFIUS due to the sale. The acquisition of the entire issued share capital of Biotest was completed on January 31, 2018. The United Kingdom's Competition and Markets Authority announced non-opposition of the acquisition on May 15, 2018, after reviewing the competitive effect of Creat acquiring Biotest and Creat's already-existing U.K. subsidiary, Bio Products Laboratory Holdings Ltd.. By April 2022, Tiancheng (Germany) Pharmaceutical Holdings AG held 89.88% of the ordinary shares and 1.08% of the preferred shares of Biotest AG. Because of U.S. regulator's opposition to Creat expanding blood plasma market in North America, which historically accounts for about 50% of the global market, Creat elected to sell Biotest. In September 2021, Grifols agreed to purchase Biotest for €1.6 billion EUR ($1.9 billion USD). On April 25, 2022, Grifols announced its completion of the acquisition of 100% of the share capital of Tiancheng (Germany) Pharmaceutical Holdings AG, which left it with a 96.20% of the voting rights and 69.72% of the share capital of Biotest AG.