In the news: Luye Medical buys Aus private hospitals, Tencent's mobile games go global and Danone sells its China baby formula brand
December 07, 2015 | BY
Katherine JoThis week a Chinese pharma group bought Healthe Care Australia, Tencent and Glu Mobile worked on westernizing a hit shooting game and Danone sold its Dumex China unit to Yashili
Chinese pharma group Luye Medical will buy private hospital operator Healthe Care Australia from private equity firm Archer Capital for $688 million. Healthe Care runs 17 hospitals with more than 1,800 beds across Australia and is the country's third-largest private hospital operator. IMS Health predicts healthcare spending in China will grow by between 14% and 17% a year. The deal follows one in September where China's Biostime International purchased stakes in Australian vitamin company Swisse Wellness. As China struggles to reform its healthcare system, it benefits from deals like these, which bring foreign expertise into the country and increase domestic competitiveness in a market being eyed by global investors. China also recently encouraged investment in private hospitals, but many risks remain amid vague guidelines and differences in local implementation. The extent that foreign investment will play a role in practice remains unclear as well.
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Tencent Holdings, which became the world's largest videogame company by dominating the Chinese market, is now seeking to export its success overseas. It is collaborating with San Francisco-based Glu Mobile to take its most successful mobile-shooting game “WeFire” to Western markets next year. A joint team is redesigning the game to make it more appealing to U.S. and European users. Research firm Newzoo estimates the global mobile games market will grow to $30.1 billion this year. Tencent earned more money from games in the first half of 2015 than Microsoft, Sony, EA and Activision Blizzard. This is a big step for the Chinese company that, if successful, will significantly enhance its international recognition.
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French dairy company Danone SA has sold the China unit of its infant formula brand to Yashili International Holdings in a move to reduce exposure to regulatory risks, analysts said. Yashili agreed to pay Danone $158.7 million for Dumex China. Danone, which was once the country's top milk powder producer in terms of sales, had trouble reviving the brand after a food safety scare involving a major supplier forced it to recall products across Asia in 2013. Analysts say Danone planned to offload Dumex China due to concerns that regulations for the dairy industry will tighten. Companies that produce baby formula and diapers have seen their shares jump in October following China's relaxed two-child policy. Market competition will increase so restrictions probably will too – the Dumex brand may be better off in Chinese hands.
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