Following regulatory approvals, Walgreens Boots Alliance said on Thursday (July 5) that the company completed an agreement to acquire a 40 percent stake of Sinopharm Holding GuoDa Drug Store. Walgreens received the stake in the Chinese pharmacy chain for a capital increase of approximately $416 million, the company said in the announcement.
“We believe GuoDa holds a strong position in the sector and, as a global pharmacy-led health and beauty enterprise, we are well-positioned to support its further growth ambition,” said Executive Vice Chairman and CEO Stefano Pessina in the announcement. “We are looking forward to sharing our international best practices and pharmacy expertise. We believe there is great potential in working together to play a transforming role in the evolving Chinese retail pharmacy market.”
In December, Walgreens Boots Alliance announced it had reached an agreement with China National Accord Medicines to invest in its unit, Sinopharm Holding GuoDa Drug Store. The unit operates retail pharmacies around China and also franchises the drug stores. The transaction was subject to a regulatory review and approval, as well as other closing conditions.
“We are very pleased to become a strategic investor in GuoDa. It is China’s leading pharmacy chain and we believe that we can positively contribute to its continued successful development with our global pharmacy expertise,” Pessina said at the time. “We have had a presence in China for around 10 years, initially through Alliance Boots, and we are excited about the opportunity to further invest in the country’s fast-growing retail pharmacy sector.”
The Walgreens investment comes after CVS announced it would purchase Aetna in a $69 billion deal. The deal — the largest transaction in 2017 so far — comes amid increased pressure on insurers to lower the cost of medical services, as well as on retailers, which face increased pressure from new market entrances, such as Amazon.