Walgreens pumps $418m into top Chinese chain

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

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.”