Harbin Pharmaceutical Group Holding Co Ltd, better known as Hayao, said it will invest about $300 million in GNC Holdings Inc, potentially becoming the single largest shareholder in the US company with a 40-percent stake.

The GNC board will be expanded to 11 members, including CEO Ken Martindale and five each from GNC and Hayao.

New York Stock Exchange-listed GNC is a health and wellness supplements brand with a presence in 9,000 locations across 50 countries. Hayao has a China-wide coverage with retailing network covering 300,000 pharmacies in 2,500 counties.

On Feb 13, Hayao and GNC also agreed to form a joint venture for the manufacturing, marketing, sales and distribution of GNC products in China, leveraging the synergies between Hayao and GNC in the fast-growing Chinese market.

CITIC Capital Holdings Limited, as a major shareholder of Hayao, is supportive of the transaction, which is expected to close in the second half of 2018, subject to approvals of regulators in the United States and China, GNC shareholders and other mandatory procedures.

Hayao's move, industry experts said, showed its commitment to exploiting the huge potential in China's healthcare sector.

According to Sun Chao, a partner of Strategy&, a division of management consultants PwC, the healthcare products market will grow to 100 billion yuan ($15.9 billion) in sales revenue in the next five years.

"We are excited about the opportunity to partner with one of the most recognized health and wellness brands globally to drive long-term value-creation in all markets in which Hayao and GNC operate," said Zhang Zhenping, chairman of Harbin Pharmaceutical Group Co Ltd.

"We are confident that we can leverage Hayao's leadership to accelerate the company's growth and expansion in China and deliver GNC products and solutions to millions."

China's healthcare sector has been attracting foreign brands, with cooperation deals and joint ventures with local product manufacturers being the common routes taken to enter the market, said industry observers.

For example, Nature's Sunshine Product Inc formed a joint venture with Shanghai Fosun Pharmaceutical Group Co Ltd in 2014.

Cooperation with Hayao will offer GNC access to the former's pharmaceutical distribution network in China. GNC has been looking to expand its reach in China. In addition, CITIC Capital's established networks and relationships will likely generate synergies.

"The deal represents important and exciting steps in our efforts to optimize our capital structure and build on our recent momentum as we position GNC to drive growth, improve financial performance and enhance long-term shareholder value," said Martindale.

"Hayao's investment in GNC is a testament to the strength of our brand and the tremendous global opportunity ahead, including in China. By partnering with Hayao and pursuing plans to amend and extend our term loan facility, we enhance our capital structure and financial flexibility and establish a strong platform for growth in the Chinese market."