HARBIN Pharmaceutical Group Holding Co. Ltd., better known as Hayao, said it will invest about US$300 million in GNC Holdings Inc., potentially becoming the single largest shareholder in the U.S. company with a 40-percent stake.

The GNC board will be expanded to 11 members, including CEO Ken Martindale and five each from GNC and Hayao.

On Feb. 13, Hayao and GNC also agreed to form a joint venture (JV) for the manufacturing, marketing, sales and distribution of GNC products in China, leveraging the synergies between Hayao and GNC in the fast-growing Chinese market.

CITIC Capital Holdings Ltd., as a major shareholder of Hayao, is supportive of the transaction, which is expected to close in the second half of 2018, subject to approvals of regulators in the United States and China, GNC shareholders and other mandatory procedures.

Hayao’s move, industry experts said, showed its commitment to exploiting the huge potential in China’s healthcare sector.

According to Sun Chao, a partner of Strategy&, a division of management consultants PwC, the healthcare products market will grow to 100 billion yuan (US$15.9 billion) in sales revenue in the next five years.

“We are excited about the opportunity to partner with one of the most recognized health and wellness brands globally to drive long-term value-creation in all markets in which Hayao and GNC operate,” said Zhang Zhenping, chairman of Harbin Pharmaceutical Group Co. Ltd.

“We are confident that we can leverage Hayao’s leadership to accelerate the company’s growth and expansion in China and deliver GNC products and solutions to millions.”

China’s healthcare sector has been attracting foreign brands, with cooperation deals and joint ventures with local product manufacturers being the common routes taken to enter the market, said industry observers.

Cooperation with Hayao will offer GNC access to the former’s pharmaceutical distribution network in China as GNC has been looking to expand its reach in the country. (SD-Agencies)