AstraZeneca’s pioneering artificial intelligence (AI) research centre could fall into foreign ownership under reported plans for the drugs giant to spin off and separately list its Chinese division.
The British company is said to be considering a plan that would see it hive off its China business and float it on a stock market in Hong Kong or Shanghai, in an effort to shield the rest of the business from geopolitical tensions.
The Chinese division owns the company’s global research and development centre in Shanghai, as well as an “AI innovation centre” being developed there.
The board of AstraZeneca has been discussing the idea of splitting off its Chinese business for months, according to the Financial Times.
It is reportedly seen as a way to protect the company from moves by Beijing to crack down on foreign companies, amid growing tensions with Washington, while also opening up new sources of capital.
A spokesman for AstraZeneca on Monday refused to comment.
“We do not comment on rumours or speculations around future strategy or mergers and acquisitions”, the spokesman added.
Astra’s AI centre was set up to “capitalise on the latest digital technology in R&D, manufacturing, operations and commercialisation in order to accelerate the delivery of medicines to patients in China and globally”, a statement in 2019 said.
On top of this, Astra has also invested heavily in manufacturing plants in China that produce a significant proportion of certain drugs.
It has manufacturing sites in Wuxi and Taizhou, cities in China’s eastern Jiangsu province.
Astra is the biggest foreign drugs company in China, with $1.6bn (£1.25bn) in annual sales.
Sir Pascal Soriot, the company’s chief executive, has also been bullish about opportunities in the country.
Asked last year about the prospect of spinning off its Chinese business, Sir Pascal said: “We always look at all options that are happening to us.
“China remains a very important country for us not only to bring our products to patients, but because it would be a great source of innovation in the future.
“You know, at least in our industry, we don’t see some of the challenges other people seem to see in China.
“China is a market that is open. It is a market where innovation is flourishing. There is a lot of investment, a lot of new science that is emerging and so we want to be part of it.”
John Hemmings, a senior director at the Pacific Forum foreign policy think tank, warned that separating its China business could open the door to future clashes between the British and Chinese management teams.
He added: “Given the statement by the president of AstraZeneca’s Chinese arm that a new company would seek to be a “patriotic country” that “loves the CCP” [Chinese Communist Party], I think there is serious concern that this separation is a fig-leaf for divorce.
“As with Arms Holdings, Chinese CEOs of Western businesses inside China know that they can fall back on the support of the CCP to separate, taking Western intellectual property with them.”
