AstraZeneca plotting to hive off its China division

AstraZeneca is planning to break off its China business to protect it against rising tensions between Beijing and the West.

The pharmaceuticals giant, which is valued at £180billion, making it the biggest on the FTSE 100, is considering listing its China division on either the Hong Kong or Shanghai stock exchange as a separate legal entity.

AstraZeneca would still retain control of the business under the plans.

Several major multinational companies are scrambling to restructure their operations to adapt to growing geopolitical tensions between China and the US and its allies.

Banking giant HSBC, which has listings in both London and Hong Kong, has come under increasing pressure from its largest shareholder, insurance giant Ping An, to separate its Asia business, which it says will allow it to boost performance in the growing market. 

Spin-off: AstraZeneca is considering listing its China division on either the Hong Kong or Shanghai stock exchange as a separate legal entity

And earlier this month US venture capital group Sequoia announced it would split off its China division into a separate entity called HongShan which would be ‘completely independent’ from its American operation.

Sequoia has previously made bets on fast-growing Chinese tech companies, including Tik Tok owner Bytedance and online shopping giant Alibaba.

AstraZeneca has been discussing the idea of carving out its China arm for several months and the matter was recently brought to the fore by a downturn in global biotech stocks, the Financial Times reported.

A listing of the business on Chinese exchanges could protect it from crackdowns on foreign companies by the Communist Party as well as help it secure faster approvals for its drugs in the lucrative Chinese market, the world’s second-largest for medicines after the US. 

China is already a core area for the pharma giant, accounting for around 13 per cent of its total revenue last year. AstraZeneca is also the largest overseas pharmaceutical firm in the country by sales.

The company shows no signs of wanting to pull back from the market. 

Boss Pascal Soriot said in April that the group ‘definitely could make acquisitions’ in China and that the country was ‘completely open’ to foreign firms.

Last month the group also signed a £468million partnership with Shanghai-based LaNova Medicines to develop and sell a cancer drug.

AstraZeneca’s move comes as US Secretary of State Anthony Blinken met Chinese President Xi Jinping this week to cool rising tensions between the two countries.

Relations have flared in recent years amid spats over the status of Taiwan, which Beijing claims as its own, as well as human rights and US efforts to curtail China’s computer chip industry.