Wal­greens pumps $418m into top Chi­nese chain

Deal comes amid surge in de­mand for medicines in coun­try’s phar­ma­ceu­ti­cal mar­ket

Gulf News - - International -

Wal­greens Boots Al­liance Inc took a 40 per cent stake in the lead­ing re­tail-phar­macy net­work in China, boost­ing its in­vest­ment in the coun­try where an ex­pand­ing mid­dle­class consumer seg­ment of­fers growth op­por­tu­ni­ties.

The US drug­store chain will in­vest $418 mil­lion (Dh1.5 bil­lion) in Sinopharm Hold­ing Guoda Drug­stores Co, a sub­sidiary of China Na­tional Ac­cord Medicines Corp that has op­er­ated re­tail phar­ma­cies across China since 2004, Wal­greens said in a state­ment Wed­nes­day. The Deer­field, Illi­nois-based com­pany, which has been present in the Asian coun­try for about a decade, said it’s “well po­si­tioned” to pro­vide ex­per­tise to Guoda and sup­port its growth.

The deal is be­ing forged as de­mand for medicines in the world’s sec­ond-big­gest phar­ma­ceu­ti­cal mar­ket surges with an age­ing pop­u­la­tion which faces ris­ing rates of chronic dis­eases such as cancer and di­a­betes. A grow­ing mid­dle-class seg­ment is also in­creas­ingly able to af­ford more ex­pen­sive drugs in­clud­ing in­no­va­tive treat­ments.

“The emerg­ing mid­dle class is a fan­tas­tic favourable wind for the in­dus­try,” Ste­fano Pessina, chief ex­ec­u­tive of­fi­cer of Wal­greens, said in an in­ter­view with Bloomberg TV yes­ter­day, speak­ing from a con­fer­ence in Guangzhou. “The mar­ket is chang­ing, the sepa­ra­tion be­tween pre­scrip­tions and de­liv­ery cre­ated op­por­tu­ni­ties.”

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