Sinovac Biotech, Ltd., a biotechnology company, has signed a joint venture (JV) agreement with Dalian Jin Gang Group Co., Ltd., a manufacturer of fine chemicals, to establish a new company, Sinovac (Dalian) Vaccine Technology Co., Ltd. (Sinovac Dalian). All the partners are based in China.

Under the terms of the joint venture, Sinovac Biotech will hold a 30% stake in the joint venture and Dalian Jin Gang will hold the remaining 70% stake. Sinovac Dalian will focus on the research, development, production and commercialization of human-use vaccines. Sinovac Dalian's development pipeline is expected to be comprised of vaccines for rabies, mumps, varicella and rubella.

Sinovac will contribute its expertise and experience in developing and commercializing vaccines. Sinovac Biotech through its wholly-owned subsidiary Sinovac Biotech (Hong Kong), Ltd., shall make an initial cash contribution of CNY60 million ($8.8 million). Dalian Jin Gang shall make an asset contribution, inclusive of its manufacturing facilities, production lines and land use rights, with an appraised value of CNY140 million ($20.53 million).

Pursuant to the agreement executed between Sinovac and Dalian Jin Gang, Sinovac will increase its equity shares to 55% in exchange for a cash contribution of CNY50 million on or before December 31, 2010.

Deal Value (US$ Million) 29.33
Deal Type                Partnership
Sub-Category             Joint Venture,Research and discovery,Development,Commercialization,Manufacturing
Deal Status              Announced: 2009-11-25

Deal Participants

Partner 1 (Company) Sinovac Biotech, Ltd.
Partner 2 (Company) Dalian Jin Gang Group Co., Ltd.

Deal Rationale

This agreement will enable Sinovac to expand its manufacturing capacity, diversify its production capabilities and increase its operational scale.

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