McKesson group rumoured to be in talks to sell European, UK businesses

Rumours that McKesson Corp. is trying to sell its chain of high street pharmacies as well as its pharmaceutical distributions have once again come to the fore following a report on Bloomberg.

In a news item updated on Wednesday (June 23), Bloomberg reported that the company was in talks with the German drug distributor Phoenix Group -- which own Phoenix UK and Rowlands Pharmacy -- sell its European operations, while it was allegedly exploring to offload its UK arm -- which includes LloydsPharmacy and distributor AAH Pharmaceuticals -- to a private equity firm.

Bloomberg reported that the divestment would be one of the largest transactions in the European healthcare industry this year, as the firm’s continental European and UK businesses have an estimated value of $3bn (£2.1bn) to $4bn (£2.8bn).

This comes after Sky News reported in February that McKesson group was in talks to sell LloydsPharmacy chain, saying "bankers at Barclays were working with McKesson on a disposal of the business and had begun contacting prospective bidders in recent weeks."

Meanwhile, McKesson is reportedly also working with advisers on the potential divestments.

A potential sale of LloydsPharmacy -- which which dispenses more than 150 million prescriptions a year across than 1,400 sites across the UK and employs about 17,000 people -- comes amid warnings about the sector's future financial viability.

LloydsPharmacy reported revenue of nearly £2bn in the year ended March 2019, according to its most recent results filed with the UK Companies House. It reported a pre-tax loss of 197 million pounds, said the report, adding the company said it decided to shed 60 stores as its business faced exceptional challenges due to reductions in drug reimbursements.