Celesio Eyed By 2 U.S. Drug Distributors
02.07.2013 -
Two U.S. drugs distribution groups McKesson and Cardinal Health are both in talks to possibly take a stake in German drugs company Celesio, two industry sources familiar with the situation said.
Celesio, which owns the Lloyds Pharmacy chain in Britain, has hired Citigroup to advise it on the talks, which include discussion of a potential business collaboration with one of the companies, the sources said. They asked not to be named because the information was not public.
The potential tie-up is another sign of how the drugs sector is having to consider partnerships in response to price pressures in the industry partly due to government cutbacks on health spending.
The three largest drugs distributors in the United States, AmerisourceBergen, Cardinal and McKesson, which between them account for 95% of the U.S. market, are all looking to grow abroad to gain purchasing power with drug makers.
In March, for example, pharmacy chain Walgreens and its European partner Alliance Boots signed a 10-year purchasing deal with AmerisourceBergen.
"After the latest transatlantic alliance signed by its competitors, CVS, McKesson and Cardinal Health are likely to be under pressure to establish a global position as well and bundle its purchasing," DZ Bank analyst Thomas Maus said in a note to clients.
"Celesio is among the top players in the European and Brazilian pharmaceutical trading sector and is an obvious takeover target."
Celesio's shares rose 6%, making them the top gainer on Germany's MDax index of medium-sized shares.
The U.S. healthcare and pharmaceutical sectors are under price pressure from the government and also consumers who want to cut their medical spending.
Celesio, for its part, is grappling with cuts to healthcare budgets across Europe, its main market, and a price war among German drugs distributors. A source familiar with the situation told Reuters last month that Celesio had been in talks with U.S. drugstore chain CVS Caremark over a possible joint purchasing cooperation.
German holding company Franz Haniel & Cie, which holds little over half of Celesio's shares, at the time denied a media report that said it was in talks with CVS to sell majority control of Celesio.
Haniel is aware of the talks with McKesson and Cardinal Health, the sources said, but it was not clear if it would sell some or even all of its shares.
Celesio, Haniel and Citigroup declined to comment. Cardinal Health and McKesson were not immediately available for comment.
Haniel has previously said that Celesio remained a core investment for the group, even though it reduced its stake last year. Haniel also sold down its holdings in retailer Metro and office equipment trader Takkt.