Bestway acquires pharmacy unit from The Co-operative

The transaction is due to be completed in October 2014, following final separation of the pharmacy business from Co-op.

The agreement follows a competitive sale process initiated by Co-op and Bestway and saw off competition from the likes of Lloyds Pharmacy, Alliance Boots and Carlyle, the US buyout firm. The sale process came about following a decision by Co-op that the pharmacy business was not part of its future strategy. The net proceeds will be used to reduce Co-op group debt and the transaction will enable it to focus strategically on its core retail and consumer services divisions.

Co-op has agreed to continue to provide certain services to the pharmacy business for up to 18 months under a transitional services agreement. Bestway will have the right to operate under the Co-op Pharmacy brand for a transitional period of up to 12 months.

Rothschild and UBS acted as financial advisers to The Co-operative Group in this transaction, with Addleshaw Goddard and Allen & Overy acting as principal legal advisors to The Co-operative Group.

KPMG acted as financial advisors for Bestway Group on this transaction, with Hogan Lovells for Legal and JPMorgan/Nomura for acquisition finance.

With this acquisition, Bestway will have an annual turnover of approximately £3.4 billion and a global workforce of more than 32,600 people, with over 11,900 people in the UK.

Zameer Choudrey, chief executive of the Bestway Group, said: “We are delighted to be bringing The Co-operative Pharmacy business into our group, adding to our growing and diverse business portfolio. In line with our own ethos, there is a strong focus on supporting and interacting with local communities within this sector.”

Richard Pennycook, interim group chief executive of The Co-operative Group, added: “The successful sale of our Pharmacy business is an important move for The Co-operative Group. The proceeds will enable the group to reduce debt and is part of the focused delivery of our clear strategic plans and priorities.

— business@khaleejtimes.com