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China-based drugmaker Harbin Pharmaceutical Group Holding Ltd. (Hayao) will invest $300 million in U.S. health and performance supplements retailer, GNC Holdings Inc., becoming the company’s single largest shareholder. This is said to be part of a strategic partnership between the two companies.

In a filing to the Securities and Exchange Commission on Tuesday, GNC said it has agreed to sell 40 percent stake to Harbin Pharma at $1,000 apiece.

The two companies have also agreed to set up a China joint venture agreement, where 65 percent would be owned by Hayao, for the manufacturing, marketing, sale and distribution of GNC-branded products in China, increasing the collaboration between Hayao and GNC in the fast-growing Chinese market.

GNC also said it is planning to prolong the maturity date of its existing term loan facility by two years to March 2021.

In September, the US retail group was reportedly searching for a partner to help bolster sales in China as it brawls weak revenues and a decline in share price. GNC’s  stock had split in value over the last 12 months, as of its close on Monday. The stock rose 18 percent on Tuesday on the New York Stock Exchange.

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The agreement comes at a time when GNC endures growing competition from online competitors and amid a great shift among customers toward organic foods rather than supplements.

However, China has been an ideal market for GNC where it has become one of the top sellers on China’s online shopping platforms. China is the largest foreign market for supplements.

Harbin Pharma, China’s leading pharmaceutical company, makes more than 20 dosage forms and over 1,000 drugs, including antibiotics, over-the-counter products, modern Chinese medicines, and animal vaccines.

A conclusive China joint venture agreement is conditional on the deal’s completion, a report said. Goldman Sachs & Co was GNC’s financial adviser on the deal, while Morgan Stanley & Co LLC and PingAn Securities advised Harbin Pharma, the companies said.

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