Alliance Boots to buy UK subsidiary of Cardinal Health

Alliance Boots is to purchase Cardinal Health UK, following clearance from the European Commission.

The pharmaceutical has gained permission from the EU Merger Regulation to acquire sole control of Cardinal Health UK. The commission states the purchase will not affect competitive activity in the European Economic Area.

Under the proposed acquisition, Alliance Boots is to purchase Cardinal Health UK’s wholesaling business through OTC Direct ? this being a subsidiary of the company, which specialises in short-line pharmaceutical wholesaling.

Cardinal Health UK is itself an active short-line wholesaling company that specialises in pharmaceuticals. Short-line activity refers to a limited range of products that are fast moving and normally sell in large quantities.

The commission states that its “examination of the proposed transaction showed that the horizontal overlaps between the activities of Alliance Boots and Cardinal Health are limited to short-line wholesaling, where the combined market share nationally is relatively low and below a level indicating market power”.

It continued that Alliance Boots is currently a “minor player” in short-lining and hence deemed that the merger with Cardinal Health UK would not be of overall detriment to the industry.

Cardinal Boots, enjoyed sales of 205 million pounds in the year ending 30th June 2005 and employs over 440 people. It operates under a variety of different names and is a subsidiary of the global enterprise Cardinal Health.