High street health and beauty group Alliance Boots is to enter the Chinese pharmaceutical market via a 50-50 joint venture with a domestic company.
China is currently the ninth largest pharmaceutical market in the world, but is predicted to rise three places by 2010.
Under the terms of the deal announced today, Alliance Boots will spend £38 million to acquire 50 per cent of GP Corp, currently 90 per cent owned by Guangzhou Pharmaceutical, the third largest pharmaceutical wholesaler in China.
The company's southern home province, Guangdong, has a population of 78 million – 16 million more than Britain.
Due to state restrictions GP Corp will open 29 retail pharmacies under Alliance Boots and Guangzhou Pharmaceutical.
The British firm's chief executive, Richard Baker, today said: "This is an exciting deal for Alliance Boots and underlines our commitment to be a major international player in pharmacy-led health and beauty."
Yang Rongming, chairman of Guangzhou Pharmaceutical, said he was "delighted" to be forming the joint venture with an experienced international partner such as Alliance Boots.
The deal, which still requires approval from both Beijing and Guangzhou Pharmaceutical shareholders, is expected to be completed in the latter half of this year, extending Alliance Boots' wholesale presence to 15 countries.
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