Alliance Boots will acquire a 12% stake in Nanjing Pharmaceutical Company Limited, the fifth largest pharmaceutical wholesaler in China, for £56 million.
On completion of the transaction, which is subject to various regulatory approvals, Alliance Boots will be the second largest shareholder in Nanjing Pharmaceutical Company Limited with Board and operational management representation.
Last year Nanjing Pharmaceutical Company Limited, which is listed on the Shanghai Stock Exchange, recorded sales of around £2bn.
The company has a strong market position in its home province of Jiangsu operating distribution centres in 12 cities across eight provinces and one autonomous region.
The strategic alliance agreement was signed by Stefano Pessina, executive chairman, of Alliance Boots, and Zhou Yaoping, chairman of Nanjing Pharmaceutical Company Limited.
Alliance Boots first entered the Chinese pharmaceutical distribution market in 2008 through its Guangzhou Pharmaceuticals Corporation joint venture, which operates in complementary geographies.
Stefano Pessina commented: “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. We believe that this strategic investment marks an important step in our long term development in Asia.”
Zhou Yaoping, chairman of Nanjing Pharmaceutical, said: “The cooperation with Alliance Boots is of great significance in the context of the slowing global economy and China’s medical and healthcare reforms. By introducing Alliance Boots advanced supply chain management technology and experience, we will be able to improve our management practices, achieve greater performance, and help China’s medical industry reach global standards.”