Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(incorporated in the Cayman Islands with limited liability)

(Stock code: 1530) (Convertible Bonds Code: 5241) ANNOUNCEMENT
  1. MAJOR TRANSACTION AND CONNECTED TRANSACTION: FORMATION OF JOINT VENTURE AND GRANT OF PUT OPTION; AND
  2. DISCLOSEABLE TRANSACTION: ACQUISITION OF THE CDMO BUSINESS
FORMATION OF JOINT VENTURE AND GRANT OF PUT OPTION

On 1 September 2017 (after trading hours), 3SBio Parties entered into the Shareholders Agreement with CPE Funds, pursuant to which, 3SBio Parties and CPE Funds have conditionally agreed to establish the Joint Venture, which is to be owned as to 51% by 3SBio Parties and as to 49% by CPE Funds. The Company seeks to establish the Joint Venture as a development and manufacturing platform operating a comprehensive and profitable biological CDMO business in North America, expanding the Group's biopharmaceutical business into North America, favourably positioning the Group to access global biopharma companies through the CDMO services in North America for the opportunities of licensing innovative products and exploring different strategic collaborations in the future, and creating potential synergies with the development and manufacturing capacity of the Group. 3SBio Parties have granted the Put Option to CPE Funds, pursuant to which CPE Funds are entitled to sell all or part of their shareholdings in the Joint Venture to 3SBio Parties from the fourth anniversary of the Closing Date, subject to the terms and conditions under the Shareholders Agreement.

ACQUISITION OF THE CDMO BUSINESS

On the same day (after trading hours), the Buyer (which will become an indirect wholly-owned subsidiary of the Joint Venture in Canada before Closing) entered into the Asset Purchase Agreement with the Seller in respect of the Acquisition, subject to fulfilment or waiver (where applicable) of conditions precedent. Pursuant to the Asset Purchase Agreement, at the Closing and effective as of the Closing Time, the Buyer has conditionally agreed to purchase the CDMO Business from the Seller, and the Seller has conditionally agreed to sell, transfer, convey, assign and set over to the Buyer all of its right, title, benefit and interest in and to the CDMO Business.

The Purchase Price for the CDMO Business is US$290 million (i.e. HK$2,268.1 million) and the assumption of the Assumed Liabilities, subject to the adjustments provided in the Asset Purchase Agreement.

LISTING RULES IMPLICATIONS Formation of Joint Venture and grant of Put Option - Major transaction and connected transaction

As at the date of this announcement, CPE Funds are associates of CS Sunshine and are therefore connected persons of the Company. Accordingly, the formation of the Joint Venture and the grant of the Put Option under the Shareholders Agreement constitute connected transactions of the Company.

In addition, both the Joint Venture and the Buyer will become connected subsidiaries of the Company. Accordingly, the provision of the full guarantee by 3SBio Parties of the obligations under the Commercial Loan to be obtained by the Buyer and the provision of the 3SBio Loan to the Buyer, each considered as financial assistance to the Buyer, also constitute connected transactions of the Company.

Since the highest applicable percentage ratio (as defined in Rule 14.07 of the Listing Rules) in respect of the formation of the Joint Venture under the Shareholders Agreement (including the capital commitment by 3SBio Parties, the provision of the full guarantee by 3SBio Parties of the obligations under the Commercial Loan and the provision of the 3SBio Loan, and having taken into account the maximum potential adjustments to the Purchase Price under the Asset Purchase Agreement) exceeds 5% but is less than 25%, the transactions amount to a non-exempt connected transaction subject to the reporting, announcement and the independent shareholders' approval requirements under Chapter 14A of the Listing Rules and a discloseable transaction subject to announcement requirements under Chapter 14 of the Listing Rules. As the Put Option contemplated under the Shareholders Agreement is exercisable at the discretion of CPE Funds and no actual monetary value of the exercise price has been determined, the grant of the Put Option will be classified as at least a major transaction for the Company pursuant to Rule 14.76(1) of the Listing Rules.

The Company will convene an extraordinary general meeting for purposes of, among other matters, seeking approval from the Independent Shareholders with respect to the formation of the Joint Venture contemplated under the Shareholders Agreement.

A circular containing, among other things, (i) the details of the formation of the Joint Venture under the Shareholders Agreement (including the capital commitment by 3SBio Parties, the grant of the Put Option, the provision of the full guarantee by 3SBio Parties of the obligations under the Commercial Loan and the provision of the 3SBio Loan, and having taken into account the maximum potential adjustments to the Purchase Price under the Asset Purchase Agreement); (ii) a letter of advice from the independent committee of the Board to the Independent Shareholders;

(iii) a letter of opinion from the independent financial advisor to the independent committee of the Board and the Independent Shareholders; (iv) the notice convening the extraordinary general meeting and a proxy form; and (v) other information as required to be disclosed under the Listing Rules, will be dispatched to the Shareholders as soon as possible but not later than 13 October 2017, as additional time is required by the Company for the preparation of the relevant information for inclusion in the circular.

Acquisition of the CDMO Business - Discloseable transaction

Since the highest applicable percentage ratio (as defined in Rule 14.07 of the Listing Rules) in respect of the Acquisition of the CDMO Business contemplated under the Asset Purchase Agreement exceeds 5% but is less than 25%, the Acquisition constitutes a discloseable transaction of the Company and is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

Closing is conditional upon the satisfaction or, if applicable, waiver of the conditions precedent set out in the Shareholders Agreement and the Asset Purchase Agreement. Accordingly, the formation of the Joint Venture, the Acquisition and other transactions contemplated under the Shareholders Agreement and the Asset Purchase Agreement may or may not proceed. Shareholders and potential investors should exercise caution when dealing in the securities of the Company. INTRODUCTION

On 1 September 2017 (after trading hours), 3SBio Parties entered into the Shareholders Agreement with CPE Funds, pursuant to which, 3SBio Parties and CPE Funds have conditionally agreed to establish the Joint Venture, which is to be owned as to 51% by 3SBio Parties and as to 49% by CPE Funds. The Company seeks to establish the Joint Venture as a development and manufacturing platform operating a comprehensive and profitable biological CDMO business in North America, expanding the Group's biopharmaceutical business into North America, favourably positioning the Group to access global biopharma companies through the CDMO services in North America for the opportunities of licensing innovative products and exploring different strategic collaborations in the future, and creating potential synergies with the development and manufacturing capacity of the Group.

On the same day (after trading hours), the Buyer (which will become an indirect wholly-owned subsidiary of the Joint Venture in Canada before Closing) entered into the Asset Purchase Agreement with the Seller in respect of the Acquisition, subject to fulfilment or waiver (where applicable) of conditions precedent. Pursuant to the Asset Purchase Agreement, at the Closing and effective as of the Closing Time, the Buyer has conditionally agreed to purchase the CDMO Business from the Seller, and the Seller has conditionally agreed to sell, transfer, convey, assign and set over to the Buyer all of its right, title, benefit and interest in and to the CDMO Business. The Purchase Price for the CDMO Business is US$290 million (i.e. HK$2,268.1 million) and the assumption of the Assumed Liabilities, subject to the adjustments provided in the Asset Purchase Agreement.

SHAREHOLDERS AGREEMENT - FORMATION OF THE JOINT VENTURE

The principal terms of the Shareholders Agreement are summarized below:

Date: 1 September 2017 Parties: (i) 3SBio Parties; and

(ii) CPE Funds.

Formation of the Joint Venture:

The Joint Venture will be owned as to 51% by 3SBio Parties and as to 49% by CPE Funds.

Purpose of the Joint Venture:

The Joint Venture will be the sole shareholder of the Buyer, which will acquire the CDMO Business from the Seller under the Asset Purchase Agreement and will enter into the Construction Agreement with the Seller relating to, among others, the construction of the commercial facility for the purpose of the commercial manufacture of plasma-related therapeutic products by the Buyer for the Products Business.

Capital Commitment and Proposed Use of Capital:

The maximum aggregate sum of capital commitment to the Joint Venture to be made by 3SBio Parties and CPE Funds, after having taken into account the maximum potential adjustments to the Purchase Price and relevant costs and expenses incurred from the Acquisition under the Asset Purchase Agreement, for the purpose of financing the transactions contemplated under the Asset Purchase Agreement and the Construction Agreement, is expected to be US$423 million (i.e. HK$3,308.4 million), assuming that (i) an aggregate maximum sum of cash contributions of US$283.8 million (i.e. HK$2,219.7 million) is made by 3SBio Parties and CPE Funds, (ii) a commercial loan of US$100 million (i.e. HK$782.1 million) is obtained by the Buyer (the "Commercial Loan"), (iii) a loan of US$39.2 million (i.e. HK$306.6 million) is provided by the Group to the Buyer (the "3SBio Loan"), and (iv) a maximum capital commitment of C$100 million (i.e. HK$619.4 million) is made under the Construction Agreement, subject to conditions.

3SBio Inc. published this content on 03 September 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 04 September 2017 07:07:09 UTC.

Original documenthttp://139.162.30.136/hkex/3sbio/docs/en/LTN20170903019.pdf

Public permalinkhttp://www.publicnow.com/view/8A2325C5FFF6E7637D607BCD5173B2C2A4D633B4