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Alliance Boots buys Turkish drug wholesaler

Alliance Boots has become the majority shareholder in Hedef Alliance Holding, one of the largest pharmaceutical wholesalers in Turkey

Alliance Boots has become the majority shareholder in Hedef Alliance Holding, which is one of the largest pharmaceutical wholesalers in Turkey, with a third of the market. Alliance Boots has increased its 50 per cent associate interest in Hedef Alliance to a 60 per cent shareholding and will increase its ownership in stages over the next two years.

Ethem Sancak, who founded Hedef with members of his family in 1987, will remain as executive chairman, with an increased personal stake.

Hedef Alliance also has a controlling 50 per cent stake in the United Company of Pharmacists, the leading pharmaceutical wholesaler in Egypt, and an associate interest in Hydrapharm, the largest wholesaler in Algeria. Hedef Alliance has consolidated revenue of around £2.4bn (€2.88bn) (of which £1.9bn [€2.28bn] is in Turkey and £0.5bn [€0.6bn] in Egypt), operates over 130 distribution centres and has more than 8,500 employees.

Turkey, with a growing population of over 72 million, is one of the 15 largest pharmaceutical markets in the world. State health insurance has been extended so that it now covers most of the population. Both the increasing population and healthcare changes make Turkey a promising country for Alliance Boots' expansion.

Stefano Pessina, executive chairman of Alliance Boots, commented: "We are delighted with this acquisition, in line with our strategy of investing internationally in strong companies in large and growing markets. In partnership with Ethem Sancak, we look forward to further developing Hedef Alliance and its businesses."

Ethem Sancak commented: "The strategic partnership we established many years ago is further developed with this transaction, taking forward Hedef Alliance's success with services to pharmacies and suppliers in the region."

Meanwhile, on July 15, Alliance Boots finalised an agreement for a joint business venture with Farmacevtföretagarna in the Swedish pharmacy market. Under the agreement, the first independently owned pharmacies are due to open in the autumn under the 'Boots' brand. The aim is to create a nationwide chain of pharmacies, owned and operated by individual pharmacy entrepreneurs.

Farmacevtföretagarna and Alliance Boots have formed new company, Boots Farmacevtföretagarna AB (51 per cent owned by Alliance Boots and 49 per cent owned by Farmacevtföretagarna) that will provide services to the new Boots pharmacies in Sweden.

Farmacevtföretagarna was originally set up by the Swedish Pharmaceutical Association. It will now separate from the association and the entrepreneurs will form Farmacevtföretagarna Ekonomisk Förening (Pharmacist Entrepreneurs Business Association), which will control Farmacevtföretagarna's share of Boots Farmacevtföretagarna AB.

26th July 2010


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