Biostime swallows Aussie vitamin maker for $992m

The Chinese baby formula maker's deal for Australia's Swisse Wellness shows SOEs have rivals for overseas M&A targets. But some wonder if Biostime is punching above its weight.

Chinese baby formula manufacturer Biostime International’s purchase of a majority stake in Australian health supplement maker Swisse Wellness sends a key message to the market - the acquisition of quality overseas assets isn't just for big state-owned players anymore.

Guangzhou-headquartered Biostime, which had a market value of $1.1 billion before the deal was announced, has taken a big bite by acquiring a controlling 83% interest in the unlisted vitamin maker for A$1.4 billion $992 million, equivalent to 22.5 times the target’s forecast earnings this year.

As the price tag values the Australian company at $1.2 billion, it means Biostime has effectively swallowed an entity that...

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