McKesson Agrees to Sell Part of Europe Arm to Phoenix Group

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McKesson Corp. agreed to sell part of its continental European unit to the billionaire Merckle family’s Phoenix Group, the largest German pharmaceutical wholesaler.

Terms weren’t disclosed. The sale includes the businesses in France, Italy, Ireland, Portugal, Belgium and Slovenia, McKesson said Wednesday in a statement. It also includes the company’s German headquarters and wound-care business, and a stake in a joint venture in the Netherlands.

The U.S. company will retain its remaining European divisions in the U.K., Norway, Austria and Denmark for now, but said it “is committed to exploring strategic alternatives for all remaining European businesses and focusing future investments on growth strategies outside of Europe.”

McKesson’s U.K. business includes Lloyds Pharmacy and drug distributor AAH Pharmaceuticals. McKesson will also retain its minority equity stake in the company’s German joint venture with Walgreens Boots Alliance.

The move largely reverses McKesson’s $8.3 billion purchase of Celesio AG in 2014. Bloomberg News reported in June that McKesson was in talks to sell its European operations to Phoenix and was also in discussions to offload the U.K. arm to a private equity firm. Bloomberg Intelligence had estimated that McKesson’s continental European and U.K. businesses combined could be valued at $3 billion to $4 billion.

Irving, Texas-based McKesson is one of three dominant drug distributors in the U.S., alongside AmerisourceBergen Corp. and Cardinal Health Inc., and has played a key role in distributing Covid-19 vaccines. The company said earlier this year that delivering vaccines and other supplies for fighting the virus would lead to stronger earnings in 2021.

McKesson shares rose 0.4% as of 10:05 a.m. in New York.

©2021 Bloomberg L.P.

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