Bestway has acquired The Co-operative Pharmacy from The Co-operative Group for £620m.
The deal, confirmed this morning after weekend reports suggested the cash & carry giant was the favourite to snap up the chain, is expected to complete in October.
It will also boost Bestway’s turnover from £2.52bn to about £3.4bn.
Commenting on the deal, Bestway CEO Zameer Choudrey said: “We are delighted to be bringing The Co-operative Pharmacy business into the Bestway family, adding to our growing and diverse business portfolio.
“In line with our own ethos, there is a strong focus on supporting and servicing the needs of the local communities within this business.
“The Co-operative Pharmacy is a strong, competitive business, operating in a sector where demographic trends show an increasing demand for healthcare services amongst the wider community.
“We see great potential to grow the business organically and through future acquisitions. We always look to take a long term approach and have a strong track record of successfully growing businesses that have previously been acquired within the group. We are confident that we will continue to do so with this business,” he added.
It has also agreed to provide certain services to the pharmacy business for up to 18 months, under a transitional services agreement. Bestway will also have the right to operate under The Co-operative Pharmacy brand for a transitional period of 12 months.
“The successful sale of our pharmacy business is an important move for The Co-op Group,” said The Co-op Group interim CEO Richard Pennycook.
“The proceeds will enable The Co-operative to reduce debt and invest in our business and is part of the focused delivery of our clear strategic plans and priorities.
“I am pleased that the agreement we have reached with Bestway reflects the quality of the business and the high level of interest from a number of bidders.
Bestway is acquiring an excellent pharmacy business characterised by the quality and professionalism of colleagues and high levels of customer service.
“Bestway in return is an ideal owner, being a strong family-run group with a proven track-record of putting the needs of customers first,” he added.
The deal was good news for The Co-op Group, said Dr Paul Simmonds, of Warwick Business School.
“From a consumer’s point of view, competition in pharmacy services will not be reduced and, at least through a transitional period, the Co-op Pharmacy brand will be retained,” Simmonds said.
“The sale to Bestway will also avoid the potential for intervention from the competition regulators. With Co-op’s pharmacy business being the third largest, sale to either Alliance Boots (number one with 2,500 stores) or Lloyds Pharmacy (number two with 1,600 stores), would inevitably have raised competition issues.
”This would have slowed down and complicated the sale process and, if allowed, may have necessitated either of those acquirers to sell individual pharmacies where competition was deemed to be compromised,” he added.