PC maker Tongfang set to make major healthcare investment

BEIJING－Tsinghua Tongfang Co, a technology arm of one of China's elite universities, is planning to acquire a stake in a maker of medical therapies, a deal that has the potential to emerge as the largest-ever investment in a Chinese healthcare company.

Tongfang is planning to buy up to 29.9 percent of Shanghai RAAS Blood Products Co, the two companies said in stock-exchange statements, adding that the terms of the transaction haven't been finalized as yet.

Based on the healthcare company's market value of $14.8 billion, purchasing a stake at that upper limit could cost more than $4.4 billion.

Tongfang plans to buy the stake with cash or by issuing shares, Shanghai RAAS said in its statement.

A maker of therapies derived from human blood plasma, Shanghai RAAS has thrived on China's surging demand for treatments used during surgery or by patients whose blood doesn't clot normally.

China is the world's largest market for blood therapies after the US and the Chinese industry's sales are expected to climb from $2.5 billion in 2014 to $6.2 billion in 2019, data provider Marketing Research Bureau estimates.

Tongfang was established in 1997 as a technology unit under China's Tsinghua University. It manufactures a wide range of products like personal computers, displays and tablets.

The company also provides IT services in the energy, healthcare and financial sectors. Tongfang operates research and manufacturing facilities in more than 20 countries and regions, according to its website.

Shanghai RAAS was informed by its two controlling shareholders that they were planning changes to the listed company's shares, according to a statement on the Shenzhen stock exchange.

Tongfang and RAAS declined to comment beyond their statements and shares of both companies have been suspended since April 21.

BLOOMBERG