— This is the script of CNBC's news report for China's CCTV on January 18, Thursday.
Chinese bidders are circling a diabetes care business owned by the world's largest healthcare company Johnson & Johnson in a deal that could fetch up to 4 billion USD, according to a report published by Reuters, citing five sources with direct knowledge.
Johnson & Johnson said in January last year that it was evaluating options for its diabetes care companies, including LifeScan, Animas, and Calibra Medical, and one option was a sale of these business.
LifeScan makes devices to monitor blood glucose levels, which are key to controlling diabetes. Animas and Calibras -- which J&J acquired in 2012 -- make insulin delivery devices. In October, Animas, which makes insulin pumps, said it would shut its business in the United States and Canada amid increased competition and after failing to find a buyer.
The sale of the diabetes business has also attracted interest from global private equity players, according to the people with knowledge of the process. But analysts said China could offer a tonic to J&J's struggling diabetes care unit and a turnaround opportunity for regional investors. Revenues at J&J's diabetes care unit have been falling since 2012, a Reuters study of the company's financial results found. In the first nine months of 2017, sales slid 7.7 percent year-on-year. In 2016, it suffered a similar decline.
Any sale by J&J of its diabetes device units would fit with a drive to exit from lower-margin, commoditized categories such as glucose meters and strips, but analysts said Asian buyers may be able to squeeze more out of the assets.
According to International Diabetes Federation, there are 425 million people with diabetes in the world, up 2.41% from the previous year. In China, there were over 114 million cases of diabetes in China in 2017, with 87.5 million facing high risks of undiagnosed diabetes.
Asia accounts for more than 60 percent of global diabetes cases, with increasing levels of wealth, unhealthy diets and more sedentary lifestyles sparking "diabetes epidemics" in the region, according to BMI Research.
Industry experts say that the market right now in the world is already close to $50 billion, In China, it is expected to grow from $6.6 billion in 2016 to $20 billion by 2025. Therefore, this is a very large and fast-growing market.
Among the potential bidders is a consortium being formed by Shenzhen-listed Sinocare, which develops and manufactures blood sugar monitoring systems, and China Jianyin Investment (JIC), a unit of sovereign wealth fund China Investment Corp. The group has hired an advisor to work on a bid, according to sources of Reuters.
CNBC's Qian Chen, reporting from Singapore