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Walgreens Boots invests in GuoDa
Posted on Thursday, 07 December 2017 07:58
Walgreens Boots Alliance has struck a deal to become an equity partner in Sinopharm Holding GuoDa Drugstore in a deal that ought to provide greater access to China’s fast-growing healthcare market.
The US powerhouse said it is making the investment after winning a public tender process to acquire a 40.0 per cent stake in the country’s largest drug distributor by volume for CNY 2.77 billion (USD 416.00 million).
Walgreens Boots did not provide much information about the actual deal, merely saying its bid “met all the requirements set by the seller” to buy a “minority stake in GuoDa through a capital increase”.
However, it seems the equity investment is in the late stages of completion, needing only a regulatory review and a rubber stamp before the overseas player can further expand on its existing ten-year presence in China.
Caixin noted Walgreens Boots, known for selling popular brands like Liz Earle, No7 and Soap & Glory, could find a niche within a country with an expanding middle class driving a growth in demand for quality healthcare products.
Established in 2004, GuoDa is the retail pharmacy platform of the state-owned enterprise known as Sinopharm and is one of the few companies in the People’s Republic with a countrywide direct drug sales network.
As at the end of June 2017, the company had a footprint spread over 19 provinces, autonomous regions and municipalities that covered nearly 70 large and medium-sized cities and nearly 3,700 stores,
It has a countrywide logistics and distribution network, which includes Shanghai National Logistics Center and 23 provincial and municipal warehouses.
GuoDa booked revenue of CNY 4.88 billion in the first six months of 2017, representing a 12.0 per cent increase year-on-year, and posted net profit attributable to its parent of CNY 99.00 million.
The business was one of several injected into China National Accord Medicines by Sinopharm last year as part of a restructuring to focus the subsidiary on pharmaceutical distribution in Guangdong and Guangxi and retail across the country.
© Zephus Ltd