Shanghai Fosun Pharmaceutical : VOLUNTARY ANNOUNCEMENT - ENTERING INTO SALE AND PURCHASE AGREEMENTS （H SHARES）

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

上 海 復 星 醫 藥（ 集 團 ）股 份 有 限 公 司

Shanghai Fosun Pharmaceutical (Group) Co., Ltd.*

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 02196)

VOLUNTARY ANNOUNCEMENT

ENTERING INTO SALE AND PURCHASE AGREEMENTS

THE PROPOSED ACQUISITIONS

The Board is pleased to announce that on 6 June 2022, the Purchaser (a subsidiary of the Company) agreed to purchase 51% and 9% equity interest in the Target Company respectively from the First Vendor and the Second Vendors under (i) the Solid Success Sale and Purchase Agreement and (ii) the Other Shareholders' Sale and Purchase Agreement for a cash consideration which shall not exceed SGD185.021 million and SGD32.651 million respectively. Upon completion of the Proposed Acquisitions, the Target Company will become a subsidiary of the Company.

As all the applicable percentage ratios in relation to the Proposed Acquisitions contemplated under the Solid Success Sale and Purchase Agreement and the Other Shareholders' Sale and Purchase Agreement, on an aggregated basis, are less than 5%, the Proposed Acquisitions do not constitute notifiable transactions of the Company under Chapter 14 of the Hong Kong Listing Rules. This announcement is therefore made by the Company on a voluntary basis.

1. PROPOSED ACQUISITIONS
   The Board is pleased to announce that on 6 June 2022, the Purchaser (a subsidiary of the Company) agreed to purchase 51% and 9% equity interest in the Target Company respectively from the First Vendor and the Second Vendors under (i) the Solid Success Sale and Purchase Agreement and (ii) the Other Shareholders' Sale and Purchase Agreement for a cash consideration which shall not exceed SGD185.021 million and SGD32.651 million respectively. Upon completion of the Proposed Acquisitions, the Target Company will become a subsidiary of the Company.

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1. Solid Success Sale and Purchase Agreement and Other Shareholders' Sale and Purchase Agreement

The principal terms of the Solid Success Sale and Purchase Agreement and the Other Shareholders' Sale and Purchase Agreement are summarized below:

Date

6 June 2022

Parties

Solid Success Sale and Purchase Agreement

1. the First Vendor;
2. Aurora Healthcare; and
3. the Purchaser

Other Shareholders' Sale and Purchase Agreement

1. SMS;
2. Mr. Chuah Yen Seong, Benjamin;
3. Mr. Kevin Tay Kuang Wei;
4. Mr. Wong Nan Soon; and
5. the Purchaser

To the best of the Directors' knowledge, information and belief, having made all reasonable enquires, the First Vendor, Aurora Healthcare and each of the Second Vendors are third parties independent of the Company and its connected persons.

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Shareholding structure

The illustrative table below sets forth the shareholding structure of the Target Company before and after the completion of the Proposed Acquisitions:

Unit: share

			Change as a result of the
	Before completion	Proposed Acquisitions	After completion
		% of		% of		% of
		equity		equity		equity
Shareholders	Shareholding	interest	Shareholding	interest	Shareholding	interest
First Vendor	2,040,000	51.00%	(2,040,000)	(51.00%)	-	-
Purchaser	-	-	2,400,000	60.00%	2,400,000	60.00%
Second Vendors
(i) SMS	1,831,374	45.78%	(336,374)	(8.41%)	1,495,000	37.38%

1. Chuah Yen Seong,

	Benjamin	44,713		1.12%	(8,213)	(0.21%)	36,500	0.91%
(iii)	Kevin Tay Kuang Wei	44,713	1.12%	(8,213)	(0.21%)	36,500	0.91%
(iv)	Wong Nan Soon	39,200		0.98%		(7,200)	(0.18%)	32,000	0.80%
Total
	4,000,000		100%	-	-	4,000,000	100%

Consideration and payment

The Purchaser proposed to purchase (i) 51% equity interest in the Target Company held by the First Vendor and (ii) a total of 9% equity interest in the Target Company held by the Second Vendors for a cash consideration determined based on the enterprise value of the Target Company plus an adjusted amount based on the completion accounts as multiplied by 51% and 9%, which is capped at SGD185.021 million and SGD32.651 million respectively (including this stated amount).

Pursuant to the Solid Success Sale and Purchase Agreement, the transfer of the 51% equity interest in the Target Company shall be completed on the 10th business day after the conditions precedent to the agreement have been satisfied (or waived) or a date as otherwise agreed by the parties in writing. At that time, the Purchaser shall pay the First Vendor a cash consideration of SGD182.930 million (the estimated consideration). Pursuant to the Other Shareholders' Sale and Purchase Agreement, the transfer of the 9% equity interest in the Target Company shall be completed on the 10th business day after the conditions precedent to the agreement have been satisfied (or waived) or a date as otherwise agreed by the parties in writing. At that time, the Purchaser shall pay the Second Vendors a cash consideration of SGD32.282 million (the estimated consideration).

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The final consideration for Target Equity I and Target Equity II will be determined respectively based on the information contained in the completion accounts as at the completion date as agreed by the parties minus the aforementioned estimated consideration, which shall be paid in the absolute amount by the Purchaser (if the relevant adjustment amount is positive) or by the First Vendor or the Second Vendors (if the relevant adjustment amount is negative) to the other party on the 5th business day after the completion accounts have been agreed by the parties accordingly.

The Purchaser will settle the consideration for the Proposed Acquisitions with internally generated funds.

Conditions precedent

Completion of the transactions under the Solid Success Sale and Purchase Agreement and the Other Shareholders' Sale and Purchase Agreement is conditional upon the following relevant conditions being satisfied on or before 31 August 2022 (or such later date as the parties thereto may agree in writing) (or being waived), among other things:

1. the shareholder(s) and director(s) of the First Vendor and SMS approving the sale of Target Equity I and Target Equity II, respectively;
2. the directors of the Purchaser approving the Proposed Acquisitions;
3. the Shareholders' Agreement having been executed by the relevant parties thereto;
4. the relevant shareholders of the Target Company as specified in the Solid Success Sale and Purchase Agreement or Other Shareholders' Sale and Purchase Agreement (as the case may be) having provided written consent to the sale and purchase of the relevant equity interest in the Target Company and having provided the written waiver of its/his right of first offer and tag-along rights to the sale and purchase of shares;
5. the Target Company having obtained all required third-party approvals and change of control consents in relation to the Proposed Acquisitions;
6. no material adverse effect having occurred to the Target Company from 6 June 2022, the date on which the Solid Success Sale and Purchase Agreement and the Other Shareholders' Sale and Purchase Agreement are entered into;
7. each of the warranties made by the First Vendor and the Second Vendors under the relevant agreement being true and accurate as of the date of the relevant agreement and immediately prior to completion; and
8. the following PRC outbound investment filings or approval having been completed by the Purchaser in respect of the Proposed Acquisitions; and

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1. in respect of the completion of Target Equity II under the Other Shareholders' Sale and Purchase Agreement, Target Equity I under the Solid Success Sale and Purchase Agreement having completed pursuant to its terms.

Others

Aurora Healthcare unconditionally and irrevocably guarantees to the Purchaser the punctual discharge by the First Vendor of its obligations of whatever nature under the Solid Success Sale and Purchase Agreement (including its liabilities to pay damages, agreed or otherwise under the Agreement) and undertakes to pay on demand each such sum the First Vendor is liable to pay under the Solid Success Sale and Purchase Agreement.

2. Shareholders' Agreement

The Purchaser enters into the Shareholders' Agreement with the Second Vendors and the Target Company with respect to certain affairs of the Target Company post-completion.

The terms of the Shareholders' Agreement are effective upon the completion of the Proposed Acquisitions.

The Shareholders' Agreement shall cease to have effect, among other things, upon the dissolution of the Company, its initial public offering or with the consensus of all the shareholders.

After the completion of the Proposed Acquisitions, the board of directors of the Target Company shall comprise of 5 directors, among which the Purchaser shall be entitled to appoint 3 directors and SMS shall be entitled to appoint two directors. The Purchaser shall be entitled to appoint one of the Purchaser's directors to be the chairperson of the board of directors of the Target Company. After the completion of the Proposed Acquisitions, the day- to-day operations of the Target Company shall be managed by two co-chief executive officers, one chief operating officer and a chief financial officer. The Purchaser shall be entitled to nominate one co-chief executive officer and one chief financial officer and SMS shall be entitled to nominate one co-chief executive officer. After the completion, Mr. Ang Cher Siang Peter will be nominated as the first chief operating officer.

Furthermore, after the completion of the Proposed Acquisitions, subject to the approval by the directors and/or the shareholders of the Target Company, the Target Company will adopt an employee share award scheme, and the shares of the Target Company under the employee share award scheme shall be equivalent to 7% of the then total issued shares in the Target Company.

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