McKesson nears deal to buy German drugs distributor Celesio for €23 per share

US health-care-services company McKesson Corp is set to buy German drugs distributor Celesio for up to €23 per share, Reuters yesterday reported, citing two people familiar with the deal.

Celesio's majority shareholder, the Haniel family, which holds a 50.01-per cent stake in the company through its holding company Franz Haniel & Cie, is nearing an agreement to sell its stake to McKesson in a deal that would value the Stuttgart-based company's equity capital at as much as €3.9 billion ($5.4 billion), the report said.

The Haniel family also holds 19 per cent of giant German retailer Metro AG.

Founded in 1835 as a chemist and dye business, Celesio is one of the largest pharmaceutical wholesalers in Europe and operates several pharmacy chains within Europe.

It has 132 wholesale branches, supplies 65,000 pharmacies and hospitals every day with up to 130,000 pharmaceutical products. Its services benefit a patient pool of about 15 million per day.

The Stuttgart-based company has 38,000 employees in 14 countries, catering to around over 2 million customers at 2,200 pharmacies.

It reported a revenue of €22.3 billion in 2012.

A completed deal would boost California-based McKesson's purchasing power in negotiations with global drug makers, similar to when US pharmacy chain Walgreen Co. acquired a 45-per cent stake in UK drug wholesaler Alliance Boots for $6.7 billion. (See: Walgreen to acquire 45 % in Alliance Boots for $6.7 billion)

The Walgreen-Alliance Boots deal created one of the world's largest drug store and pharmacy retailers with more than 11,000 stores in 12 countries, 365,000 employees worldwide, revenue of around $110 billion, market leader in Europe and the US, and the world's largest pharmacy wholesale and distribution network.

McKesson has recently gone on an acquisition spree and its latest purchase was carried out in October 2012 when it acquired PSS World Medical Inc for approximately $2.1 billion.

McKesson provides vital medicines and supplies, and information technology solutions that enable the healthcare industry to provide patients better and safer care.

It operates in two primary business categories: distribution solutions and healthcare technology solutions.

The company is the largest pharmaceutical distributor in North America with about one-third market share. It supplies to over 40,000 US pharmacies from Wal-Mart to community pharmacies and hospitals.

McKesson is also one of the leading medical supply companies and distributes medical-surgical supplies and homecare supplies.

The company's healthcare technology solutions provide software and hardware eliminating the need for paper prescriptions and paper medical records.