Alliance to buy Nanjing Pharmaceutical stake

Europe’s largest pharmacy chain owner Alliance Boots, will buy a 12% stake in China’s Nanjing Pharmaceutical (600713.SS) for roughly US$91 million, Reuters reported, citing an Alliance statement. The company aims to buy up to 30% of the Chinese pharmaceutical distribution market. The deal will strengthen ties with China’s government and regulators following a joint venture in 2008 with Chinese Guangzhou Pharmaceuticals. Nanjing Pharma is China’s fifth-largest pharmaceutical wholesaler, with a market capitalization of US$682 million and about US$3.2 billion in sales last year. The deal, which must still gain regulatory approval, will make Alliance the second-largest shareholder in Nanjing, which has a network covering 12 cities over eight provinces and one autonomous region. Alliance’s Executive Chairman Stefano Pessina said in an interview that China is committed to improving its healthcare and that the company would look to fill a greater role in the country. “In 10 years, I hope we will be one of the major players in China,” he said.