Ping An Insurance Ends Shanghai JV with Shionogi
China’s Ping An Insurance has finalized its exit from its joint venture (JV) in Shanghai with the Japanese pharmaceutical giant, Shionogi. Corporate data indicates that Ping An Life Insurance has relinquished its stake, with Shionogi Hong Kong now holding complete ownership.
According to reports, Shionogi will acquire all shares of Ping An-Shionogi and Ping An-Shionogi Hong Kong. This move dissolves the JVs, making them wholly-owned subsidiaries of the Osaka-based company.
Shionogi Hong Kong will be acquiring Ping An Life’s 49 percent stake in Ping An-Shionogi, which focuses on pharmaceutical research, development, manufacturing, and sales in China. Furthermore, it will purchase Ping An Overseas Holdings’ 49 percent stake in Ping An-Shionogi Hong Kong, which manages intellectual property licenses, and imports and exports within Asia.
Reportedly, Ping An and Shionogi decided to dissolve their Shanghai JV because of differing development objectives. Ping An aims to prioritize its insurance business, while Shionogi will center its focus on new drug development and sales within China.
The partnership between Ping An and Shionogi began in 2020. At that time, Ping An Life Insurance acquired a 2 percent stake in the Osaka-based company for JPY33.5 billion (USD227 million), becoming its seventh-largest shareholder. This stake later grew to 2.2 percent.
Notably, the dissolution of the JVs will not impact Ping An’s equity investment in Shionogi. In July 2021, Ping An-Shionogi launched with a total investment of CNY2.9 billion (USD400 million). The aim was to establish a comprehensive medical firm integrating new drug research and development, drug sales, and medical services.
Ping An has been investing in the healthcare business as a new growth driver. Ping An Healthcare and Technology, also known as Ping An Good Doctor, saw its net profit turn positive for the first time last year, reaching CNY81 million (USD11 million), compared to a loss of CNY323 million (USD44.6 million) the year before, with revenue increasing by 3 percent to CNY4.8 billion (USD663 million), according to its annual report.
Established in 1878, Shionogi is Japan’s fifth-largest pharmaceutical company, specializing in antiviral and neurological diseases.
