McKesson Corporation, parent company of LloydsPharmacy, today (July 7) signed an agreement to sell some of its European business to the German drug distributor Phoenix Group.

The agreement encompasses sale of its businesses in France, Italy, Ireland, Portugal, Belgium, and Slovenia, as McKesson looks at “strategic path” to fully exit the European region.

Last month, market talks had emerged that McKesson was trying to sell its chain of high street pharmacies as well as its pharmaceutical distributions.

The transaction is expected to complete in 2022, “subject to customary closing conditions, including receipt of required regulatory approvals,” the company said in a statement.

“Today’s transaction marks an important step in advancing McKesson’s commitment to streamline the business and prioritise investments in the areas where we have deep expertise and are central to our long-term growth strategy,” McKesson chief executive officer Brian Tyler said.

“We are confident that under the Phoenix group’s strong leadership, the businesses included in this agreement will be well-positioned for the future to compete more effectively and better serve customers,” he added.

The Phoenix group, which owns Phoenix UK and Rowlands Pharmacy, is a leading integrated healthcare provider and a leader in the European healthcare sector.

Meanwhile, McKesson will continue to operate its remaining European businesses in the UK, Norway, Austria, and Denmark, which are “not included in this transaction”, it said in a statement.

Besides, the company is committed to explore strategic alternatives for all the remaining European businesses and focus on future investments outside of Europe.

“Our goal is to accelerate our growth strategies, becoming a more focused organisation and enabling our mission to improve care in every setting,” Tyler added.

McKesson will also retain its minority equity stake in the company’s Germany joint venture with Walgreens Boots Alliance.

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