AstraZeneca plotting to hive off its China division

AstraZeneca plans to break down its operations in China to protect it from rising tensions between Beijing and the West.

The pharmaceutical giant, valued at £180 billion, making it the largest on the FTSE 100, is considering listing its Chinese division on either the Hong Kong or Shanghai stock exchanges as a separate legal entity.

AstraZeneca would still retain control of the company, according to the plans.

Several large multinational corporations are trying to restructure their operations to adapt to growing geopolitical tensions between China and the US and their allies.

Banking giant HSBC, with listings in both London and Hong Kong, is under increasing pressure from its largest shareholder, insurance giant Ping An, to spin off its Asian operations, which it says could improve performance in the growing market.

And earlier this month, US venture capital group Sequoia announced it would spin off its Chinese division into a separate entity called HongShan that would be “entirely independent” of its US operations.

Sequoia has previously placed bets on high-growth Chinese tech companies, including Tik Tok owner Bytedance and online shopping giant Alibaba.

AstraZeneca has been discussing the idea of ​​splitting its Chinese arm for several months, and the issue was recently brought to the fore by a fall in global biotech stocks, the Financial Times reported.

A listing of the company on Chinese stock exchanges could protect it from a crackdown on foreign companies by the Communist Party, as well as help it gain faster approvals for its drugs in the lucrative Chinese market, the world’s second largest. for drugs after the US.

China is already a core territory for the pharmaceutical giant, accounting for about 13 percent of its total sales last year. AstraZeneca is also the largest foreign pharmaceutical company in the country by revenue.

The company shows no signs of withdrawing from the market.

Boss Pascal Soriot said in April that the group “could definitely make acquisitions” in China and that the country was “fully open” to foreign firms.

Last month, the group also signed a £468 million partnership with Shanghai-based LaNova Medicines to develop and market a cancer drug.

AstraZeneca’s move comes as US Secretary of State Anthony Blinken met with Chinese President Xi Jinping this week to defuse rising tensions between the two countries.

Relations have flared in recent years over disputes over the status of Taiwan, which Beijing claims as its own, as well as over human rights and US efforts to clamp down on China’s computer chip industry.