30 Nov 2010 08:07

Cardinal Health acquires Zuellig China for $470 mln

Shanghai. November 30. INTERFAX-CHINA - Cardinal Health Inc., the second largest pharmaceutical distributor in the U.S., has paid $470 million to acquire Zuellig Pharma China, a health care distributor and China's largest pharmaceutical importer, Cardinal Health announced Nov. 29.

Zuellig China's management team, including President Eric Zwisler, has joined Cardinal Health, according to the announcement.

The acquisition will drive Cardinal Health's growth outside North America, its CEO George Barrett said in the statement.

Established in 1993, Zuellig China has annual sales of more than $1 billion. The company's distribution network covers 31 of China's 34 provincial-level administrative regions, and its customer base includes about 49,000 hospitals and clinics, and more than 123,000 pharmacies.

China's pharmaceutical distribution market is expected to grow at an compound annual rate of 20 percent through 2014 to make it the second largest pharmaceutical market in the world after the U.S.

"Cardinal Health might seek mergers and acquisitions (MA) in China," Zhao Bing, pharmaceutical analyst from Shanghai Securities, told Interfax Nov. 30. "[As a foreign company,] it will face difficulties acquiring state-owned firms, but there many private distributors which are attractive targets."

According to the analyst, China's medical distribution industry is preparing for a slew of MAs following recent initial public offerings (IPO) by some big players in the sector.

- KZ