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US giant McKesson snaps up Lloydspharmacy parent company for £5bn

Business The US healthcare giant's chief executive John Hammergren says community pharmacies will benefit from "increased scale, supply chain expertise and sourcing capabilities" as a result of the deal with Celesio

US healthcare giant McKesson has struck a £5.1 billion ($8.3bn) deal to buy Lloydspharmacy and AAH parent company Celesio by 2014.


The deal with McKesson, a specialist in wholesaling and healthcare technology, will make the combined company one of the largest pharmaceutical wholesalers and healthcare service providers in the world, Celesio said in an announcement today (October 24).


The joint company will have a stake in more than 11,000 pharmacies and make daily deliveries to 120,000 pharmacies and hospitals across 20 countries – putting it on par with the Boots-Walgreens partnership.


McKesson said community pharmacies would benefit from "increased scale, supply chain expertise and sourcing capabilities" as a result of the deal

More acquisition news

Lloyds and AAH parent Celesio shake-up yields 4.5 per cent profit rise

Walgreens to acquire 45 per cent stake in Alliance Boots in £4.27bn deal

Watson-Actavis deal will 'strengthen' support to UK pharmacists

Community pharmacies would benefit from "increased scale, supply chain expertise and sourcing capabilities" as a result of the deal, said McKesson chairman and chief executive John Hammergren.


McKesson will buy 50.1 per cent of Celesio's shares upfront, with plans to buy the remaining publically owned shares by March 2014. Celesio will become part of McKesson's distribution solutions division in 2015, but both companies will maintain their own brands and "continue to support customers through existing channels", the companies said.


Together, they will have more than 80,000 employees and predicted annual revenues of more than £92.6bn ($150bn). The companies expect to make annual savings of between £170 million ($275m) and £201m ($325m) in the fourth year of the deal.


"The combination of McKesson and Celesio will create a leading global healthcare services platform that will advance our customers' ability to deliver better, more efficient healthcare solutions," said Mr Hammergren.


McKesson was ranked the 14th highest-grossing US company by Fortune magazine this year. The company reported a 0.2 per cent decline in revenue for the 2012-13 financial year, but still made a net income of £800m ($1.3bn) after tax.


Last year, Celesio reported a 4.5 per cent rise in year-on-year profits to £490.9m.


Download the full details here.


How will the McKesson deal affect the UK pharmacy sector?

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24 Comments

Leon The Apothecary, Student

It'd be nice to see a new group rise. An ethical and moral company where patients and staff are top priorities. Staff are paid fair wages and the delivery of healthcare is of more importance than bottom lines and overheads.

Perhaps I'm just dreaming.

Sue Per, Locum pharmacist

Dream On, we are past the point of no return.

Indrakumar ( Andy) Bakhai, Other pharmacist

The only way up for retail pharmacies is to diversify like the Yanks or professionalise like our European colleagues.

Pankaj Sodha, Community pharmacist

Will the Americans get access to a lot of stock for their market and cause more shortages here?

Amal England, Public Relations

Using the Wallgreens takeover of Boots as a template one can expect more of the following at Lloyds:
Appalling customer service,
Appalling staff satisfaction levels,
Derogatory level of professionalism from management,
Scant respect towards the pharmacist's,
Demolition of professional autonomy,
Devious and sly attempts to deregulate pharmacy,
Devious and sly attempts to lower pharmacist and staff wages,
The list is endless- this is devastating news for pharmacy UK and bad news for patients. It is common knowledge that when a corporation goes beyond a certain size, many outposts decline in every aspect- this more evident in the USA than probably the rest of the world combined.

Pankaj Sodha, Community pharmacist

With the americans coming into the UK market place, they will bring in their expertise of the mobile to capture more business. Pharmacies resting on their laurels will cetrainly pay for it!

John Randell, Non Pharmacist Branch Manager

YES YES YES.....i know it sounds bad but truth is privatisation i will mean more money in pharmacists pocket since people will have to pay for their medication CASH and we dont have to wait months to be paid by the NHS

END RESULT RICHER PHARMACISTS JUST LIKE AMERICA.....MAY NOT BE SO GREAT FOR THE PEOPLE WHO CAN T AFFORD THEIR MEDICATION BUT....HEY THAT CAPITALISM FOR YOU......

Stephen Jones,

shameful attitude are you in the right job ?

John Randell, Non Pharmacist Branch Manager

PHARMACISTS SHOULD STOP BIENG SOFT...THIS IS FIRST AND FORMOST RETAIL AND IF YOU DIDNT KNOW THAT BEFORE YOU JOINED PHARMACY SCHOOL NOW YOU KNOW

Pharmacist Pharmacist, Community pharmacist

Mr Stephen Jones you're only a student yet. In a few years you shall also be fighting for the pot of money.

Ian Kemp, Community pharmacist

No Stephen, of course he's not in the right job. Should have been a GP.

Chris Locum, Locum pharmacist

May not be so great if too many pharmacists are willing to fall and fight over a dwindling pool of jobs for less and less pay - even if patients are paying. We will be collecting on behalf of monolithic entities.

Jide Opaleke, Locum pharmacist

But there is no control of entry restrictions in the US. Does that mean anything to you?

John Randell, Non Pharmacist Branch Manager

They still earn far more mate than we do so they must be doing something right.....just saying....

i know its not a very nice thing for the patient to pay £200 cash for that special but belive me something has to be done to make pharmacy in the UK economically viable.

And control of entry does not work, it only takes a supermarket with 100 hour contract to move next to you and your finished or an online pharmacy to poache your customers..........

PHARMACISTS SHOULD STOP BIENG SOFT...THIS IS FIRST AND FORMOST RETAIL AND IF YOU DIDNT KNOW THAT BEFORE YOU JOINED PHARMACY SCHOOL NOW YOU KNOW.....

Jide Opaleke, Locum pharmacist

If Pharmacy is first and foremost a retail set up and you fear that control of entry doesn't work. Why then is pharmacy shop a protected business competition wise, noting that there are enough pharmacist to serve in the most remote areas as necessary bringing into question the financial cushion given to contractors to enslave the pharmacist employee/ locum. Should we not welcome the consideration of specialist community pharmacy services that will see more direct benefit to the patient and NHS whilst creating greater opportunities for pharmacists as a healthcare professional to excel. I think this will be more satisfying professionally than the quasi professional situation we have at present where our remuneration is being squeezed because of lack of proper professional status but just that of a glorified shop keeper. I am far more experienced for your snide remark about pre and post pharmacy school knowledge and probably could have taught you in pharmacy school. There are different perception about professionalism and we need to recognise that. The common denominator is not just money and money alone.

John Randell, Non Pharmacist Branch Manager

The common denominator is not just money and money alone.

WRONG ANSWER

AGAIN LET ME BREAK THIS DOWN.....boots,lloyds, and all independents are buisnesses...buisnesses are legally obligated to put the wishes of their share holders first...A BUISNESS MUST MAKE PROFIT TO BE VIABLE SO YES IT IS JUST ABOUT MONEY......... (yes i suppose you could do a non-profit pharmacy but you would be know as the starvin pharmacist)

ITS SAD THAT PHARMACY SCHOOLS DONT TEACH stock rotation, margins, profit/loss,P/E ratio etc....instead they learn alot of clinical stuff that is only relevant to hospital........

Jide Opaleke, Locum pharmacist

I am sorry but Pharmacy is not just any other kind of business because it trades on the back of a profession like no other business. As a business you can get direct incentives, tax rebates etc. The practice allowance and fees paid are for professional services not business services also other types of businesses do not get protection from competition as control of entry does for pharmacy. You should not have to profit from the extortion of the labour force backbone of the business else you do not have a right to the protection of your business. That is to say YOU CAN NOT EAT YOU CAKE AND HAVE IT

John Randell, Non Pharmacist Branch Manager

By the way control of entry DOES NOT MEAN YOUR BUISNESS IS PROTECTED CARS and THE INTERNET WERE INVENTED A LONG TIME AGO.if a customer is not happy they will SWITCH PROVIDERS

John Randell, Non Pharmacist Branch Manager

Sounds like the current system is working well then..........maybe its just me who sees other pharmacists suffering and having to take jobs for £15 an hour because of BUISNESS concepts like supply and demand........

Good to know that some peole are happy with current state of affairs...

Papa Echo, Community pharmacist

Hmmm let's see Asda-Walmart, Boots-Walgreens, now McKesson-Lloydspharmacy/ Celesio.... Next up... Co-op - CVS retail group ????!!!

O J, Community pharmacist

So boots is american
Lloyds is american
Co-op?..next?
New NHS boss is american

Is everything going to be privatised and follow the american health model?

Chris Locum, Locum pharmacist

could be a bitter pill coming...

Stephen Eggleston, Community pharmacist

and yet obama is trying to impliment an nhs-style plan in the us?!

Z ZZzzzz, Information Technology

Of course it will. Has Sue Sharpe anything to say about these developments? Or is PSNC fully aware of what us likely to happen to the NHS in future, but too afraid to tell contractors and would rather divert them into worrying about delivering "Services" as a complete red herring. Makes you wonder.

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