AstraZeneca may soon spin off its business in China

AstraZeneca plc (LON: AZN) is considering spinning off its business in China, the Financial Times reported on Monday.

Listing in Shanghai or Hong Kong also possible

The pharmaceutical behemoth could restructure its operations in the said region and list them as a separate legal entity in Shanghai or Hong Kong, the daily business newspaper added.

Anonymous sources also confirmed that the drugmaker has been exploring the idea with bankers for months now. Still, the prospect of deciding against separation remains on the table.

The stock market news arrives a couple months after AstraZeneca plc reported its financial results for the first quarter that easily topped Street estimates.

At writing, shares of the British-Swedish multinational are roughly flat for the year.

Why may AstraZeneca spin off its China business?

AstraZeneca generated about 13% of its total sales last year from China – the world’s second largest market for pharmaceutical companies.

In May, its President for China Operation had revealed plans of committing to be a patriotic company that “loves the Communist Party”. Spinning off, though, offer means for AstraZeneca to avoid getting caught in the crosshairs of the U.S. – China tensions.

The London-listed firm responded to the FT report today saying it didn’t comment on “rumours or speculations”.

Wall Street currently has a consensus “buy” rating on AstraZeneca stock that pays a dividend yield of just over 2.0% at writing.