McKesson scrambles Canadian market with buyout bid for Uniprix drug group

SAN FRANCISCO The planned takeover of Quebec’s Uniprix drug store group by drug distribution and health services giant McKesson Corp. would add new muscle to McKesson’s aggressive bid for more of Canada’s pharmacy market and scramble the competitive landscape for rivals Shoppers Drug Mart, Jean Coutu Group and Katz Group Canada.

McKesson revealed Monday its offer to buy Uniprix Inc., which owns the Uniprix, Unipharm and Uniclinique store banners and comprises Quebec’s second-largest drug store group. The deal, which is subject to regulatory and shareholder approval, would add some 400 independent drug stores in Quebec that are serviced by Uniprix to McKesson’s fast-growing distribution network in Canada, and pose new challenges to Katz, Jean Coutu and Shoppers.

Under terms of McKesson’s offer, pharmacy owners under the Uniprix service umbrella would retain ownership in their stores. “McKesson Canada is enthusiastic about the prospect of this transaction, which will strengthen our longstanding business relationship with the Uniprix Group for the distribution of pharmaceutical products, over-the-counter medications and consumer products,” said McKesson Canada president Domenic Pilla yesterday. “We believe that if our offer is supported by the shareholders and approved by the regulatory bodies it will benefit the Uniprix Group’s independent member-pharmacists through enhanced product and service offerings to customers, while bringing increased financial flexibility to the banners and sustaining its network of independent pharmacy owners.”

Noting the nearly three-decade business relationship between the two companies, Uniprix president and CEO Francois Castonguay endorsed the merger, calling it “a natural partnership.”

The purchase of Uniprix would be the second major acquisition for McKesson Canada in recent months. Last June, the company bought Quebec-based Groupe PharmEssor, which serviced some 270 independent drug stores under the Proxim and ProxiMed banners.

McKesson now supplies pharmaceuticals and other products to 6,300 retail pharmacies in Canada, as well as 1,350 hospitals, long-term care centers and other institutions in the country. The company also provides automation services for some 2,500 retail pharmacies, according to a McKesson report.