McKesson closes on $8.3-billion acquisition of Celesio

Drug distribution goes global as McKesson follows AmerisourceBergen's overseas tieups; will Cardinal stick only with its China subsidiary?

The anticipated deal by McKesson to acquire Germany’s Celesio, a leading European wholesaler and retail pharmacy operator in Europe and parts of Latin America and Asia is official; McKesson has come to terms with the Haniel group, a family conglomerate that owns 50.1% of Celesio, and is offering to buy remaining shares in the company at an estimated 39% premium. (The deal needs 75% participation to be completed.) In an analyst’s statement on Oct. 24, McKesson CEO John Hammergren squelched speculation that a US retail chain would be involved in the acquisition (CVS Caremark had been one such company rumored to be interested), in contrast to the hookup among AmerisourceBergen, Walgreens and Alliance Boots announced early this year. (In that deal, Walgreens will be acquiring Alliance Boots over a period of time, and the two of them have both already purchased equity stakes in AmerisourceBergen, while ABC has a 10-year agreement to supply Walgreens.)

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The Celesio acquisition, when completed in the first half of 2014, will make McKesson a $150-billion/year power in international drug distribution. McKesson has much smaller businesses involved with, among other things, specialty pharma services, healthcare IT systems and medical devices. McKesson is also a major force in Canadian drug wholesaling. Meanwhile, Cardinal continues to invest in the Chinese wholesaler, Zuellig, it acquired in 2010.

There’s an interesting history being written in drug wholesaling: Beginning in the 1990s, regional wholesalers were scooped up to form the Big Three wholesalers, a process that has slowed to a trickle in recent years. Meanwhile, all three have attempted, with varying degrees of success, to build ancillary services and business units over the past decade; now, in the 2010s, the focus is to move beyond US borders.