Why Plasma Therapeutic Company Grifols Shares Are Rising Today

Grifols, S.A. GRFS shares are trading higher after the company reached a strategic Alliance and share purchase agreement with Haier Group Corp to sell approximately a 20% equity stake in Shanghai RAAS (SRAAS) in exchange for roughly $1.8 billion.

The two companies will explore opportunities to combine Grifols' plasma and diagnostic excellence with Haier's portfolio of healthcare solutions. 

Grifols and Haier envision broad cooperation to contribute to China's growing and developing healthcare system.

"China remains core to our growth strategy. We are extremely pleased to establish an alliance with Haier, a global leader in innovation that shares our commitment to innovation, quality and safety," said Raimon Grifols, Grifols Chief Corporate Officer. 

The proceeds from this transaction, which is subject to customary closing conditions, including regulatory approvals, will be used to reduce Grifols' debt.

Grifols will still retain a significant ~6.58% stake in SRAAS as well as a seat on its Board of Directors. 

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SRAAS' 45% economic and 40% voting rights in Grifols Diagnostic Solutions (GDS), agreed to in 2020, stay the same.

As part of the share purchase agreement, Grifols and SRAAS will lengthen their exclusive albumin distribution agreement through at least the next 10 years, and possibly 20, with guaranteed minimum supply volumes over the next five (2024-2028). 

China's demand for albumin is expected to continue growing significantly in the coming years. It currently accounts for more than 50% of global albumin consumption.

"Through this groundbreaking alliance we expect to be able to further support China's healthcare system needs and offer innovative medicines and diagnostic solutions for patients. Moreover, this agreement marks another major step forward as we meet our commitments, and will contribute to our growth momentum heading into 2024," Grifols added.

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Price Action: GRFS shares are trading higher by 9.74% to $11.55 on the last check Friday.