KKR eyes foothold in German drug wholesale -sources

FRANKFURT, Aug 20 (BestGrowthStock) – Buyout firm KKR (KKR.N: ) may
boost its stake in Germany’s Anzag, three people familiar with
the matter said, a move that could see KKR’s UK unit Alliance
Boots [ABN.UL] enter the German drugs wholesale market.

Germany’s Celesio (CLSGn.DE: ), Europe’s largest drugs
distributor, has said it aims to sell this year its 12.5 percent
stake in Anzag (ANZG.F: ) worth around 33 million euros ($42
million). Celesio has been roiled by the accounting impact from
massive price swings in the illiquid and volatile share.

The sources said on Friday that Alliance Boots was in talks
with Celesio over a deal, which would trigger a mandatory
takeover bid since KKR already owns nearly 30 percent in Anzag.

Anzag, whose full name is Andreae-Noris Zahn AG, is among
the four largest players in the 25 billion euro German drugs
distribution market.

The talks highlight renewed interest in the sector, which is
set to grow due to the country’s ageing population.

Celesio itself has been the subject of market talk it may be
targeted by U.S. peers such as Medco (MHS.N: )but Celesio’s
majority owner, family-owned conglomerate Haniel, has shown no
inclination to sell so far.
Alliance Boots Executive Chairman Stefano Pessina, who
teamed up with KKR to buy the group for about 11 billion pounds
($17.10 billion) in 2007, said in May that he aimed to build
Boots into a global brand. [ID:nLDE64G04M]

KKR has long trained its sights on the German wholesale
market. Sources told Reuters in March that KKR had extended
informal offers to buy unlisted drug distributor Phoenix that
were rejected by the owner, industrial heir Ludwig Merckle.
[ID:nLDE664158]

PHOENIX TO KEEP STAKE

Anzag is far too small to be included in any index with its
free float of just 8.4 percent and market value of only 270
million euros.

The stock rose 2.4 percent to 25.60 euros in thin trading on
the floor of the Frankfurt exchange. Celesio shares lost 0.4
percent in electronic Xetra trading to 16.53 euros.

Anzag’s other investors include Phoenix with a 12.5 percent
stake and rival distributor Sanacorp with 24.99 percent.

An industry source told Reuters that Phoenix was not
thinking about hiving off its Anzag stake at the moment.

KKR, Anzag and Celesio declined to comment. Officials at
Phoenix were not immediately available for comment.

A Sanacorp spokesman said the group would not rule out a
sale of its Anzag stake.

The Financial Times Deutschland paper earlier reported that
Celesio was holding talks with Alliance Boots over the sale of
its stake in Anzag and that it was also in talks with at least
one smaller financial investor.
($1=.7806 Euro)
($1=.6431 Pound)
(Reporting by Frank Siebelt and Ludwig Burger; Editing by
Michael Shields)

KKR eyes foothold in German drug wholesale -sources