이 기사는 2021년 08월 27일 07:55 thebell 에 표출된 기사입니다.

A consortium led by China’s Sihuan Pharmaceutical has lost the bidding war for botox maker Hugel even after offering a higher bid than what a rival consortium led by South Korea’s GS Holdings offered, seemingly due to concerns about technology transfer controls.

The GS consortium Tuesday agreed to acquire a controlling stake and convertible bonds in the South Korea-based pharmaceutical company from US private equity firm Bain Capital in a deal worth about 1.7 trillion won ($1.5 billion). The consortium includes GS Holdings – GS Group’s holding company – Seoul-based private equity firm IMM Investment, Singapore-based investment firm CBC Group and Abu Dhabi sovereign fund Mubadala.

The GS consortium beat out a bidder group consisting of Sihuan Pharmaceutical, Goldman Sachs Asset Management and Baring Private Equity Asia.

The Sihuan-led consortium made an offer late in the bidding process. Its offer was reportedly about 10% higher than what the GS consortium offered, which made the seller take more time to evaluate offers both from financial and non-financial perspectives.

The GS consortium was ultimately named as the winner, probably because the seller did not want to take a risk of the deal being stopped by regulatory hurdles, industry watchers said.

“Apparently the fact that Sihuan Pharmaceutical, a Chinese pharmaceutical company, is included in the consortium troubled the seller because of tightened regulations on technology transfer,” said an industry insider.

Botulinum toxin, used to make botox for aesthetic and medical purposes, is also one of the agents that can be used to make biological weapons because of its potent toxicity. Any acquisition by a foreign buyer of shares in a company that owns botulinum toxin technology needs to follow reporting requirements mandated by the South Korean government.

Although the GS consortium’s special purpose vehicle is based in the Cayman Islands, the investor group is led by GS Holdings and IMM Investment, both of which are based in South Korea. In contrast, the Sihuan-led consortium consists entirely of foreign firms.

“If the Sihuan-led consortium was selected, that would attract more scrutiny from regulatory authorities, which could increase uncertainty of the deal closing. This is probably the situation that the seller wanted to avoid,” another industry insider said. (Reporting by Ha-na Suh)