Alliance Boots to buy 12% stake in Nanjing Pharmaceutical

Alliance Boots said it will buy a 12% stake in China’s Nanjing Pharmaceutical Co, the news reports said. The European drugstore chain said it will complete the transaction through a private placement of around 56 million pounds ($90.8 million).

The stake acquisition will make Alliance Boots Nanjing Pharmaceutical’s second-largest shareholder with management representation.

The move marks the latest foreign acquisition in China’s healthcare sector, as the investors expect further government reforms to boost the private-sector involvement.

The private equity companies including Carlyle Group and RRJ Capital have been active investors in the country’s healthcare sector this year. Shanghai-listed Nanjing Pharmaceutical reported sales of about 20 billion yuan ($3.2 billion) last year and operates in 12 cities across China.

Alliance Boots had a joint venture in China since 2008 with Guangzhou Pharmaceuticals Corp. U.S.-based pharmacy giant Walgreen Co has about 45% stake in Alliance Boots through a $6.7 billion deal struck in June. Both of them together operate over 11,000 drugstores in U.S., Europe, and Asia under the Walgreens and Boots names.

Alliance Boots is a well-known pharmacy-led health and beauty group that delivers a wide range of products and services to its customers. Nanjing Pharmaceutical Company is listed on the Shanghai Stock Exchange and is the fifth largest pharmaceutical wholesaler in China.