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JunHe Assisted Grifols, a Madrid and NASDAQ Listed Company, in its Strategic Investment in Shanghai RAAS, an A-share Listed Company by way of Cross-border Share Swaps


On March 31, 2020, Grifols, S.A., a company listed on the NASDAQ and Bolsa de Madrid (NASDAQ: GRFS, Bolsa de Madrid: GRF, hereinafter referred to as "Grifols"), acquired 26.2% of the equities of Shanghai RAAS Blood Products Co., Ltd., an A-share listed company (stock code: 002252, hereinafter referred to as "Shanghai RAAS"), and the corresponding shares are listed on the Shenzhen Stock Exchange, completing the final closing of Grifols’ strategic investment in Shanghai RAAS by way of cross-border equity swaps.

Headquartered in Barcelanoa, Grifols (in Chinese: 基立福) is a leading company in the plasma products industry, the largest in Europe and ranking top 3 in the world, whose shares are listed on the Bolsa de Madrid and the Nasdaq respectively. GDS is a subsidiary of Grifols engaged in blood diagnostics, with a focus on nucleic acid testing, immunoantigen and blood type testing. GDS is a world-renowned manufacturer of blood testing instruments and reagents, and a leading company in the global blood nucleic acid testing market segment, with a high reputation in the field of blood testing. Its predecessor is the first company that discovered the HCV virus, and invented the PCR nucleic acid detection technology to detect HIV and HCV virus in blood, and GDS has at all times maintained the technical advantages in the field of segmentation.

Shanghai RAAS is a well-known blood product manufacturing enterprise in China, whose shares are listed on the SME board of the Shenzhen Stock Exchange. It is a large Sino-foreign joint venture blood products manufacturer established in 1988, specialized in the production and sale of blood products, vaccines, diagnostic reagents, and testing instruments, and the provision of testing services. 

In this transaction, Shanghai RAAS issued 1,766,165,808 shares to Grifols to purchase 40 outstanding Series A common shares (representing 40% of the 100 outstanding Series A common shares of GDS) and 50 outstanding Series B common shares (representing 50% of the 100 outstanding Series B shares of GDS) held by Grifols in GDS, as approved by the CSRC. The appraisal price of the equity interests in the above transaction was RMB13.246 billion. Following this transaction, Grifols holds 26.2% of the shares of Shanghai RAAS as a foreign strategic investor (it is the largest shareholder of Shanghai RAAS according to the announcement of Shanghai RAAS dated March 30, 2020); Shanghai RAAS holds 45% of the shares of GDS, and the remaining 55% of the shares of GDS is still held by Grifols.

In this transaction, acting as the PRC legal counsel to Grifols, JunHe provided comprehensive and all-round legal services in relation to the feasibility of this transaction, the design and compliance demonstration of the transaction plan, the major adjustments to the transaction plan, information disclosure, domestic and foreign transaction negotiations and the approval/filing by the competent domestic authorities. In addition to having a solid legal background, JunHe advised on the restructuring plan in this transaction and assumed most of the role of a domestic transaction coordinator. JunHe team was highly praised by the client and other intermediaries for its coordination ability, commercialized thinking, quick response and diligent working style in this transaction. 

This project is extremely complex unprecedented, which is mainly reflected in the following aspects:

 (1) No precedent for the transaction type. For a long time, the transaction consideration is generally paid in cash in cross-border mergers and acquisitions in which Chinese listed companies are involved, while a few transactions that are paid in equity mostly include mergers and acquisitions of companies with state-owned background or under the same control. This transaction is the first cross-border share swap transaction between a private A-share listed company and an overseas listed company in the true sense, which is groundbreaking in the context of changes in foreign investment regulations.

 (2) Complicated approvals at home and abroad. This transaction involves the issuance of shares by listed companies to purchase assets, cross-border share swaps, strategic investment by foreign investors, overseas investment, anti-monopoly review, national security review and many other regulatory dimensions, the approval authorities involve the China Securities Regulatory Commission, the Ministry of Commerce of China, the National Development and Reform Commission of China, the Committee on Foreign Investment in the United States, the U.S. Federal Trade Commission, the U.S. Department of Justice, and other government authorities at home and abroad, and the transaction parties involve China, Spain, the U.S. and others, which takes nearly 12 months to complete all domestic and overseas approvals with the assistance of various intermediaries;

(3) Large transaction amount. This transaction is the largest M&A transaction in the global blood products market so far in 2020, with a consideration of approximately RMB 13.246 billion yuan. Faced with the highly complex regulatory background, JunHe team actively communicated with all parties, provided the client with accurate analysis and practical legal advice with its deep understanding of PRC laws and experience in cross-border transactions, and facilitated and contributed to the consummation of this transaction.

The leading partners of this Project are CHEN, Jiang (Joe), TAO, Xudong and ZHU, Yan.

JunHe is the only Chinese law firm to be admitted as a member of Lex Mundi and Multilaw, two international networks of independent law firms. JunHe and selected top law firms in major European and Asian jurisdictions are “best friends.” Through these connections, we provide high quality legal services to clients doing business throughout the world.