In a move to strengthen Boots’ presence in the Chinese pharmaceuticals market, the firm has paid £56m for a 12% stake in Nanjing Pharmaceutical. The deal will make Boots the second-largest shareholder in the Chinese company, with a place on the board. Nanjing is listed on the Shanghai stock exchange and last year had sales of around £2bn, making it the fifth largest firm of its type in China.
The deal comes just a few months after Pessina sold 45% of Alliance Boots to Walgreens, with the possibility of the US outfit purchasing the remainder at a later date. Perhaps he is trying to add value to the business ahead of any further deals to sell the rest of the company…
On the latest plans, Pessina said: ‘We are delighted to be partnering with such an established player in the Chinese pharmaceutical market and believe there is huge potential in working together to create a great healthcare distribution network.’ There’s no doubt Nanjing has a big network, with distribution centres in 12 cities across eight provinces.
Boots has been open about its big plans for China. When it first entered the market in 2008, it said it was aiming for a 20-30% share of the pharmaceutical distribution market in the country. What would Jesse Boot make of it? It’s all a long way from Boots’ beginning as a herbal remedy shop in Nottingham, way back in 1849.
Pessina hopes his firm will be ‘one of the major players in China’ within a decade, and buying into such a large distribution network is obviously a good start.