SFDA Interprets Issues Concerning Cross-Provincial M&A Involving Medical Apparatus Manufacturers

On June 2, 2009, the State Food and Drug Administration (the "SFDA") released the Reply on Issues Concerning Cross-Provincial Mergers and Acquisitions of Medical Apparatus Manufacturers (the "Reply"). According to the Reply, in the event that a medical apparatus manufacturer acquiror purchases another medical manufacturing enterprise in a different province, and thereafter applies to change its registered address to the address of the acquired entity, the application must be examined and approved by competent authorities in accordance with Article 21 of the Administrative Measures for the Supervision of the Manufacturing of Medical Apparatus ("Article 21"). If the acquired enterprise is still registered as an "independent manufacturer" following the acquisition ("independent manufacturer," as is stipulated in Article 21, refers to a manufacturer that maintains a separate business license and is able to bear civil liability independently), this acquired entity, rather than the acquiror, shall apply to its local authority for a change to the Medical Apparatus Manufacturer License and the Medical Apparatus Registration Certificate of the acquiror. If the acquired entity is no longer an independent manufacturer after the merger, the acquiror must apply for renewal or initial registration of its own Medical Apparatus Registration Certificate. Although not stipulated in the Reply, relevant authorities interpret the Reply as being applicable to all medical apparatus manufacturers in China, including foreign-invested manufacturers, and all affected parties should ensure compliance.


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