US-based global health care product manufacturer Johnson & Johnson will take over the stake in a local drug joint venture held by its Chinese partner after nearly a decade of co-operation.

The acquisition of the stake currently held by the Shanghai No 1 Biochemical & Pharmaceutical Co Ltd, signals the US firm's long-term commitment to the Chinese market, said company officials.

However, the joint venture is still reportedly operating in the red.

Shanghai Johnson & Johnson Pharmaceutical Ltd will become the US-based company's wholly-owned operation after the acquisition of 10 per cent stake belonging to the Shanghai firm.

"The two sides have finished negotiations regarding the stake acquisition and are now waiting for government approval," Richard Zhang, public relations council chairman of Johnson & Johnson's China operations, told China Daily.

"To transform the joint venture into a wholly-owned business of Johnson & Johnson shows our confidence in and commitment to the China market," he added.

But it seems that Johnson & Johnson is not the only beneficiary from the transfer of the stake.

Shanghai No 1 Biochemical & Pharmaceutical's decision to sell its 10 per cent stake is part of a broader decision by Shanghai Pharmaceutical (Group) Corp (SPGC), the firm's parent company, to withdraw from joint venture partnerships where SPGC has a non-influential equity share holding, according to a statement presented by Johnson & Johnson China operations.

The aim of SPGC's equity transfer is to "consolidate resources and strengthen core businesses per strategic objectives," said the statement.

Source: China Daily