AstraZeneca, London’s biggest listed company, is looking at plans to spin off its Chinese businesses to protect it from geopolitical tension, according to a report.
Citing people familiar with the situation, the Financial Times said the British-Swedish drugs giant has been in talks with bankers for several months.
When contacted by the PA news agency, AstraZeneca did not wish to comment on the report.
The plan would separate Astra’s Chinese operations into a separate company whose shares would be traded on the Hong Kong or Shanghai stock exchanges.
Astra would keep control over the business, the report said.
It comes amid increasing geopolitical tension between Western countries, including the US and many in Europe, and China.
By separating off its Chinese arm, the drugs giant hopes to be better protected against political reprisals from Beijing against foreign companies.
It could also provide more reassurance for investors in the West that they are not too exposed to China, the FT reported.
Along with the US, Japan, Germany and France, China is one of the world’s top five biggest pharmaceutical markets.
An AstraZeneca spokesman said: “We do not comment on rumours or speculations around future strategy or M&A (mergers and acquisitions).”
But in last year’s annual report, the company warned that “over the next two decades, the geopolitical environment is expected to become more contested, potentially reaching levels of intensity not seen since the Cold War”.
Perhaps now best known for its development, in conjunction with researchers at the University of Oxford, of one of the Covid-19 vaccines, AstraZeneca is the largest company whose shares are traded in London.
Its market value is around £182 billion, which puts it ahead of Shell, worth £158 billion, and HSBC, worth £122 billion.
The company has a research and development office in Shanghai and employs 16,500 people in China, more than in any other country apart from the US.
It made revenues of around 5.7 billion dollars (£4.5 billion) in the country last year.
Press Association – August Graham