Harbin Pharmaceutical's US$760M agreement to acquire GNC approved by bankruptcy court

Date Closed

October 07, 2020

Lead Office

Toronto

Value

760.00 Million USD

On August 20, 2020, the US bankruptcy court ruled the stalking horse agreement between Harbin Pharmaceutical Group Holding Co. Ltd. (Harbin) and GNC Holdings Inc. (GNC) to be satisfactory. Harbin agreed to bid US$760 million plus the assumption of certain liabilities to establish a minimum purchase price for GNC's assets.

GNC filed for Chapter 11 protection on June 23, 2020 and, upon filing, said it would either sell or reorganize the company. Following acceptance of Harbin’s stalking horse bid, the deadline for other companies to submit a bid is September 11, 2020, and the auction will be held on September 15, 2020. GNC and Harbin have agreed to extend the closing date to October 31, 2020 if Harbin is the highest bidder.

Harbin is an affiliate of CITIC Capital (China), a Chinese company that in 2018 formed a partnership with GNC Holdings Inc. and become its biggest shareholder. Harbin invested US$300 million in GNC in exchange for the right to make, market and sell GNC-branded products in China.

GNC Holdings Inc. is a Pittsburgh, Pennsylvania-based American company selling health and nutrition related products, including vitamins, supplements, minerals, herbs, sports nutrition, diet, and energy products.

McCarthy Tétrault LLP advised CITIC Capital (China) with a team led by Jonathan See and Scott Bergen that included Robert Richardson and Jake Irwin (Corporate), Ian Mak (Financial Services), Sean Collins and Walker MacLeod (Bankruptcy & Insolvency), Oliver Borgers (Antitrust & Foreign Investment) and Raj Juneja (Tax).

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