Tongjitang delists in first take-private transaction under revised Cayman law

The acquisition of Tongjitang Chinese Medicines Company by Tonsun International, and the delisting of its American depositary shares (ADSs) from the New York Stock Exchange on 21 April, was the first take-private transaction to be effected under new Cayman Islands merger provisions introduced in 2009.

Tongjitang specializes in the development, manufacture, marketing and sale of modernized traditional Chinese medicine in China. The company’s delisting followed its agreed acquisition by Tonsun, a Cayman Islands exempted company controlled by Hanmax Investment and Fosun Industrial.

Under the merger agreement, each ordinary share in Tongjitang issued and outstanding immediately prior to the merger (except for ordinary shares and ADSs owned by Tonsun, Hanmax and Fosun) was cancelled in exchange for the right to receive US$1.125 per ordinary share and US$4.50 per ADS. The merger agreement was approved by Tongjitang’s shareholders on 31 March.