* Biostime buying a company similar to its market value
* Australian vitamin makers popular among Chinese suitors (Changes sourcing and adds details of deal)
By Byron Kaye and Denny Thomas
SYDNEY/HONG KONG, Sept 17 (Reuters) - Hong Kong-listed Biostime International Holdings 1112.HK is buying Australian vitamin maker Swisse Wellness for about A$1.6 billion ($1.2 billion), people familiar with the matter told Reuters on Thursday.
The deal comes as Australian vitamins manufacturers have been enjoying a rush of popularity in China because of a weak Australian dollar and a trade deal that has cut import taxes for Australian companies selling products into the mainland.
For Biostime - a dietary supplements maker - the acquisition is a big bite, as the deal value is similar to its own $1.1 billion market capitalisation. The company is taking out a bridge loan to part-fund the acquisition, one of the people said.
Biostime suspended its shares earlier on Thursday pending an announcement. The company was not immediately available to comment.
Investor interest in Australian vitamin makers has been rising. On Wednesday, Australian vitamin maker Vitaco Holdings Ltd VIT.AX debuted at a 23 premium to its issue price after raising A$232 million in an initial public offering.
Another Australian vitamin maker, Blackmores Ltd BKL.AX , has seen its shares grow four-fold in the past year, thanks largely to a surge in Chinese sales.
Biostime beat Shanghai Pharmaceuticals Holding 601607.SS and Chinese private equity firm Hony Capital in the Swisse sale which was managed by Goldman Sachs Group Inc (NYSE:GS) GS.N , the Australian newspaper and Fairfax Media said in reports, citing unnamed sources.
Hony Capital and Shanghai Pharmaceuticals could not be immediately reached for comments.
HSBC HSBA.L is advising the buyer, one of the sources said. Swisse declined to comment, while Goldman Sachs was not immediately available for comment.
The sources declined to be identified as the information is not public. ($1 = 1.3949 Australian dollars)