Chinese pharmaceutical group may bid for ailing GNC
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Chinese firm Harbin Pharmaceutical Group is poised to take over and privatize US vitamin and retailer supplier GNC.
The firm acquired a 40-per-cent shareholding in the company last year, initiating an e-commerce business in joint venture with GNC in China. Harbin currently owns its stake as convertible preferred shares.
The potential takeover is complicated by GNC’s heavy debt load, which four months ago stood at US$900 million, and the current political climate between China and the US. GNC has lost more than half its value over the past year.
GNC operates more than 4800 stores in the US and has franchises in 46 international territories. It is expected to shutter 900 outlets by the end of next year.
Questions & Answers
Q.What is the current relationship between Harbin Pharmaceutical Group and GNC?
What is the current relationship between Harbin Pharmaceutical Group and GNC?
Harbin Pharmaceutical Group currently holds a 40-per-cent shareholding in GNC. This stake is held as convertible preferred shares, and they initiated a joint venture for an e-commerce business in China last year.
Q.What are the main challenges facing Harbin Pharmaceutical Group's potential takeover of GNC?
What are the main challenges facing Harbin Pharmaceutical Group's potential takeover of GNC?
The potential takeover is complicated by GNC’s significant debt, which was US$900 million four months ago. The current political climate between China and the US also presents a challenge to the acquisition.
Q.How many GNC stores are expected to close in the near future?
How many GNC stores are expected to close in the near future?
GNC is expected to close 900 outlets by the end of next year. The company operates over 4800 stores in the US and has franchises across 46 international territories.
Q.What has been GNC's financial performance over the past year?
What has been GNC's financial performance over the past year?
Over the past year, GNC has experienced a significant decline in value. The company has lost more than half of its total value during this period.
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