Alliance Boots has announced plans to form a 50-50 joint venture with Guangzhou Pharmaceutical Corporation (GP Corp), China's third largest pharmaceutical wholesaler.
The joint venture will run in 29 pharmacies in China, the maximum number allowed under Chinese law. The 50% stake is said to have cost Alliance Boots £38m and investment will be made through a UK subsidiary, in which Beijing MedPharm Corporation (BMP) holds a 20% stake. It will take Alliance Boots' wholesale presence to 15 countries.
Alliance Boots ceo, Richard Baker commented: “This is an exciting deal for Alliance Boots and underlies our commitment to be a major international player in pharmacy-led health and beauty. The Chinese market has good growth potential and this move demonstrates our belief in the ability of the group to drive growth through developing opportunities in new markets.”
China is the ninth largest global pharmaceutical market and is expected to jump up three places to sixth largest by 2010. The joint venture is conditional up GP Corp shareholder and regulatory approval but is expected to be complete in the second half of 2007.