Alliance Boots acquires stake in Chinese wholesale market
LONDON — Alliance Boots, under the terms of a strategic alliance agreement signed earlier this week, announced that it will acquire a 12% stake in Nanjing Pharmaceutical for a total consideration of approximately $90.7 million. On completion of the transaction, which is subject to various regulatory approvals, Alliance Boots will be the second largest shareholder in Nanjing Pharmaceutical with board and operational management representation.
"This agreement builds on the success we have already had in China and further strengthens our commitment to the country as well as our willingness to play an active role in the evolution of the market in partnership with the authorities and key players," Alliance Boots executive chairman Stefano Pessina said. "We believe that this strategic investment marks an important step in our long-term development in Asia.”
"By introducing Alliance Boots advanced supply chain management technology and experience, Nanjing Pharmaceutical will be able to improve its management practices, achieve greater performance and help China's medical industry reach global standards, as well as support the pharmaceutical sector in establishing a vibrant social responsibility," Nanjing chairman Zhou Yaoping said.
Nanjing Pharmaceutical, which is listed on the Shanghai Stock Exchange, is the fifth-largest pharmaceutical wholesaler in China with sales of around $3.2 billion in 2011.
Alliance Boots first entered the Chinese pharmaceutical distribution market in 2008 through its Guangzhou Pharmaceuticals Corporation joint venture, which operates in complementary geographies.