Alliance Boots buys Chinese drug wholesaler stake
Drugstore chain Alliance Boots will spend about 560 million yuan ($88.5 million) to acquire a 12 percent stake in Nanjing Pharmaceutical Co. Ltd., China's fifth-largest drug wholesaler.
The deal, announced Sunday, comes a month after Walgreen Co. completed an initial investment of nearly $7 billion in privately held Alliance Boots. Walgreen, the largest U.S. drugstore operator, has said an expansion in emerging markets like China is one of the reasons it decided to invest in Switzerland-based Alliance Boots, which runs the largest drugstore chain in the United Kingdom.
Alliance Boots runs more than 3,300 health and beauty retail stores in 11 countries.
Nanjing Pharmaceutical had 2011 sales of around 20 billion yuan ($3.16 billion), according to Alliance Boots.
Walgreen, based in Deerfield, Ill., said in June it planned to initially buy a 45 percent ownership stake in Alliance Boots, and it has an option to buy the rest of the company in about three years.
Shares of Walgreen fell 27 cents to $35.75 in Monday morning trading, while the Standard & Poor's 500 index also dropped slightly.