GNC Holdings Inc. has received federal approval to proceed with an investment deal involving Harbin Pharmaceutical Group, a Chinese company.
Thursday, GNC reported to the Securities and Exchange Commission that on Sept. 7, the company received notice from the Committee on Foreign Investment in the United States that “there are no unresolved national security concerns with respect to such transactions.”
The American Action Forum found that eight of the committee’s previous 10 denied transactions involved Chinese companies, the agency reported in April. However, the president makes the final decision regarding approval or denial, according to the organization.
GNC announced in February that Harbin Pharmaceutical, which operates as Hayao, planned to invest $300 million in the company, which makes vitamins and supplements and operates retail locations nationwide. Steve Twedt of the Pittsburgh Post-Gazette, reported that Hayao will make, market and sell GNC-branded products in China.
Overwhelmingly, GNC’s stockholders approved in May the company’s proposal to issue preferred stock shares as part of the partnership with Hayao.
While CEO Kenneth Martindale has said the deal should close in the second half of this year, the company reported in the SEC filing that it cannot guarantee the closing will happen this year. The Chinese government must still approve the transaction, according to that filing.
GNC stock closed at $3.65 Thursday, a 26.3 percent increase from the $2.89 per share closing price on Wednesday.
For the second quarter of fiscal 2018, GNC saw same-store and e-commerce sales decrease slightly and revenue fall 9.4 percent to $617.9 million. During that earnings call, Martindale said the company has also signed a licensing deal in India and a franchise agreement in Australia, both of which should start this year.