WuXi AppTec Accelerates Middle East Expansion by Divesting Chinese Assets
WuXi AppTec Co. (2359.HK; 603259.SH), a leading drug services provider, is focusing on its international growth by selling non-core businesses in China. The company recently agreed to sell two clinical research units—WuXi Clinical and WuXi MedKey—to Hillhouse Investment Management for 2.8 billion yuan ($390 million).
This sale is the latest step in WuXi’s strategy to free funds and strengthen its global production network across Asia, Europe, and North America. The company aims to build a more resilient supply chain capable of adapting to changing market demands and external challenges.
Plans for a New Production Facility in Saudi Arabia
A few days after the sale announcement, WuXi AppTec revealed a preliminary agreement to establish a manufacturing base in Saudi Arabia’s NEOM project. NEOM is a large-scale initiative intended to become a cutting-edge innovation hub in the Middle East.
Strategic Focus on Core Competencies
The divestment, conducted through WuXi AppTec’s wholly owned subsidiary in Shanghai, aligns with the company’s focus on drug discovery, testing, and manufacturing. WuXi emphasized that this shift would accelerate the expansion of its global capabilities.
"The sale of the two Chinese businesses fits with a strategy of focusing on core strengths in drug discovery, testing, and manufacturing," the company stated.
Financial Impact
The two units involved in the sale generated a combined unaudited revenue of approximately 1 billion yuan, supporting WuXi’s move toward international growth.
Author’s Summary: WuXi AppTec is sharpening its global focus by divesting non-core Chinese assets and planning a new manufacturing facility in Saudi Arabia’s NEOM, reinforcing its international expansion strategy.