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Bloomberg
American pharmaceutical distributor McKesson Corp. is exploring a sale of its European business, according to people familiar with the matter, in a move that would reverse its $8.3 billion purchase of Germany’s
Celesio AG in 2014.
Phoenix Group, Germany’s largest pharmaceutical wholesaler, which is owned by the billionaire Merckle family, is in talks to acquire the continental European business.
McKesson is also in talks to sell its UK business, which includes the Lloyds Pharmacy chain and wholesale distribution business AAH Pharmaceuticals, to a private equity firm, the people said. Irving, Texas-based McKesson is working with advisers on the transactions, they said.
Any deal would help narrow McKesson’s focus on the US, where it’s one of three dominant drug distributors, alongside AmerisourceBergen Corp and Cardinal Health Inc. The company has played a key role in distributing Covid-19 vaccines, and said earlier this year it expected that delivering vaccines and other supplies for fighting the virus would lead to stronger earnings in 2021.
Its shares, which have climbed 22% over the past 12 months, closed up 0.73% on Tuesday at $190.10, giving McKesson a market valuation of about $29 billion.
While talks are advanced, they could still be delayed or fall apart, the people said. A spokesman for McKesson said the company “doesn’t respond to rumors or speculation.†A representative for Phoenix couldn’t be immediately reached for comment outside of regular business hours.
A sale of the European and UK operations would cap a series of moves to undo McKesson’s takeover of Celesio, which it announced it was buying in 2013 for $8.3 billion, including debt. That deal was completed the following year and has been the company’s largest acquisition since 1998, according to data compiled by Bloomberg.
Since then, McKesson has announced a pact in 2019 to combine its German operations with Walgreens Boots Alliance Inc. AmerisourceBergen, meanwhile, is bulking up in Europe after agreeing to buy Walgreens’ business on the continent for $6.5 billion in January.
Bloomberg Intelligence analyst Jonathan Palmer estimates McKesson’s continental European and U.K. businesses could be valued at $3 billion to $4 billion, based on the price that AmerisourceBergen paid for the Walgreens assets, and because the McKesson units are less profitable.
Palmer said he viewed the German partnership with Walgreens as the first step toward a bigger divestment in the region.