Hyderabad , Sept. 26

MATRIX Laboratories Ltd has entered into a share purchase agreement with the promoters of Mchem group, China, for acquiring a controlling stake of about 60 per cent in the Mchem group.

In a press release here on Monday, Matrix said the transaction will be completed before the year-end, subject to fulfilment of certain conditions/formalities and obtaining the requisite approvals from the regulatory authorities.

According to Matrix, the acquisition of substantial stake in Mchem group will help it backward integrate into China for manufacture of intermediates and help consolidate its position as a major supplier of active pharmaceutical ingredients (APIs), particularly anti-retrovirals (ARVs), worldwide.

This will also provide Matrix access into the Chinese pharmaceutical market, which is growing at a rapid pace. Going by the latest reports on HIV/AIDS infections worldwide, the Matrix release said, the demand for ARVs is expected to grow considerably in China over the next few years.

Based in Xiamen, on the East coast of China, the Mchem group manufactures pharmaceutical products ranging from basic chemicals, intermediates to APIs and finished dosage forms with a group turnover of about $35 million. Mchem also has 40 finished dosage form registrations approved for manufacture/supply in China.

The Mchem group has been engaged in the manufacture of HIV/AIDS medicines for more than five years and also supplies to state-owned companies in certain Asian countries.

The Mchem group recently signed an agreement with the President Clinton Foundation, making it the only Chinese company supplying intermediates and APIs to the Foundation Partners besides supplying finished dosage forms to the Chinese Government sponsored HIV programme. The Matrix Executive Chairman, Mr N. Prasad, said, "The acquisition of substantial stake in Mchem group is a strategic step towards strengthening our supply chain and to establish ourselves as a cost effective manufacturer. With absolutely no overlap of products, customers and markets, Matrix would further strengthen its presence in the global markets."

The Mchem group Chairman, Mr Mark Gao, said, "Mchem group is looking forward to working with Matrix in its strategic pursuit, and our combined strengths is expected to deliver the best performance. Mchem group would continue to be associated with the existing business partners in the areas of manufacturing and distribution."

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