Alliance Boots jv to acquire stake in Guangzhou Pharmaceutical

Alliance BMP, the UK-based investment vehicle formed by Beijing Med-Pharm Corporation and Alliance Boots, Europe's leading pharmacy-led health and beauty group, has agreed to acquire a 50% interest in Guangzhou Pharmaceuticals Corporation (GP Corp), the third largest pharmaceutical wholesaler in China, for RMB545m (US$69m).

Alliance Boots will own 80% of Alliance BMP and Beijing Med-Pharm will own 20%. Alliance BMP will hold four of the eight GP Corp. board seats. The formation of Alliance BMP also creates a vehicle through which Beijing Med-Pharm and Alliance Boots can make additional investments in China. Guangzhou Pharmaceutical Company (GPCL), a Hong Kong Exchange-listed company whose ultimate parent is the Municipality of Guangzhou, will retain ownership of the remaining 50% of GP Corp.

'The unique knowledge and capabilities of Beijing Med-Pharm made them an ideal partner for this transaction,' said Stefano Pessina, executive deputy chairman, of Alliance Boots. 'This investment gives Alliance Boots a strong and scalable platform in one of the world's largest and fastest growing markets and represents an exciting opportunity for expansion within China.'

The transaction, which is subject to a number of closing conditions including GPCL shareholder approval and various regulatory approvals, is expected to be completed in the second half of 2007.