Beijing Med-Pharm Corporation announced that Alliance BMP Limited, a UK-based investment vehicle 80 percent-owned by Alliance Boots and 20 percent-owned by Beijing Med-Pharm, received its business license from the Guangzhou Municipal City Government's Bureau of Industry and Commerce.
Effective immediately, Alliance BMP Limited will account for financial results from its 50 percent stake in Guangzhou Pharmaceuticals Corporation (GP Corp), the third largest pharmaceutical wholesaler in China. The accretive transaction is expected to close by the end of January 2008, at which point Beijing Med-Pharm will complete payment for its 20 percent stake in the joint venture and Mr David Gao, Chief Executive Officer, Beijing Med-Pharm will commence serving as Chairman of GP Corp.
Mr David Gao, Chief Executive Officer, Beijing Med-Pharm said, "We are very excited to receive our joint venture business license and complete this critical step in closing the acquisition of the 50 percent stake in GP Corp." The transaction involves a total capital investment of RMB 545 million ($74.4 million) in cash in exchange for a 50 percent ownership interest in GP Corp.
Mr Gao further said, "We believe our joint efforts can greatly change the dynamics of China's pharmaceutical distribution methods, especially in southern China, as we consolidate a fragmented market and enhance efficiency through scale. We look forward to working with GP Corp. as well as Alliance Boots, a proven market leader in Europe, to capitalize on this opportunity."
GP Corp. was founded in 1951 and is a subsidiary of Guangzhou Pharmaceutical Company Ltd. (GPCL), a company listed on the Hong Kong and Shanghai exchanges whose ultimate parent is the Municipality of Guangzhou. GPCL will retain ownership of the remaining 50 percent of GP Corp.
GP Corp. has grown rapidly in recent years, with annual revenues increasing from RMB 4.4 billion ($565 million) in 2003 to RMB 7.4 billion ($0.9 billion) in 2006. GP Corp. serves more than 12,000 hospitals, pharmacies, and other wholesalers from eight distribution facilities located throughout Guangdong Province and southeast China.