Exclusive: U.S. drug firms vie to take stake in Celesio - sources

Mon Jul 1, 2013 10:42am EDT
 
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By Frank Siebelt and Philipp Halstrick

FRANKFURT (Reuters) - Two U.S. drugs distribution groups McKesson Corp MCK.N and Cardinal Health Inc CAH.N are both in talks to possibly take a stake in German drugs company Celesio CLSGn.DE, two industry sources familiar with the situation said.

Celesio, which owns the Lloyds Pharmacy chain in Britain, has hired Citigroup C.N 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 ABC.N, Cardinal and McKesson, which between them account for 95 percent of the U.S. market, are all looking to grow abroad to gain purchasing power with drug makers.

In March, for example, pharmacy chain Walgreen Co WAG.N and its European partner Alliance Boots ABN.UL 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 percent, making them the top gainer on Germany's MDax .MDAXI index of medium-sized shares.   Continued...