On 6th December 2017, the large retail pharmacy, health and “daily living destination” announced it had reached an agreement with China National Accord Medicines to enter into an investment deal with its subsidiary enterprise, Sinopharm Holding Guoda Drugstores.
The subsidiary operates throughout China and also boasts franchising retail pharmacies across the country.
The alliance was made after a public tender process. The accepted bid will see Walgreens Boots Alliance take a 40% minority stake in Guoda through a capital increase worth RMB 2.767 bn (approximately €53.3 mn).
A regulatory review and approval are still set to take place to complete the transaction, along with other standard closing conditions. Walgreens Boots Alliance has stated that once completed, it will utilise an equity method investment to account for this acquisition.
A leading retail pharmacy chain in China, Gouda, has aimed to expand its chain across the country, in conjunction with “ongoing healthcare reforms and the increasing importance of the pharmacy channel” in the nation, Walgreens Boots Alliance revealed in a recent press release.
“We are very pleased to become a strategic investor in GuoDa,” stated Stefano Pessina, Executive Vice Chairman and CEO, Walgreens Boots Alliance. “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.”
“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,” Pessina went on to say.
Complementing China’s health care reforms
Established in March 2004 and headquartered in Shanghai, Sinopharm Holding Guoda Drugstore ('Guoda') is China National Pharmaceutical Group Corporation's (CNPGC) retail pharmacy platform.
With over 3,500 retail pharmacies across approximately 70 cities, in 2016, Guoda was consolidated into China National Accord Medicines (Shenzhen Stock Exchange).
The CNPGC’s current strategy is to build upon its existing growth in the State-owned pharmaceutical and healthcare sector. As such, Guoda plans to take “advantage of the unprecedented opportunities created by the Chinese health care reform to further expand nationwide”.