AB. Alliance Boots

RNS Number:2624Q
Alliance Boots plc
29 January 2007

                                                                 29 January 2007


  Alliance Boots to enter Chinese pharmaceutical market through joint venture


Alliance Boots plc, a leading pharmacy-led health and beauty group, today
announces that it has reached an agreement to form a 50:50 joint venture in
Guangzhou Pharmaceuticals Corporation ("GP Corp"), the third largest
pharmaceutical wholesaler in China.

China is the ninth largest pharmaceutical market in the world.  It is
experiencing rapid economic growth which is driving even higher growth rates for
healthcare expenditure.  As a result, China is expected to be the sixth largest
pharmaceuticals market by 2010.  The Chinese pharmaceutical wholesale and
distribution market is fragmented and largely regionally-based and principally
involves supply to hospital pharmacies.

GP Corp is the third largest pharmaceutical wholesaler nationally with around a
3% market share, and is the leader in its home province of Guangdong with a
market share of approximately 16%.  Guangdong has a population of around 78
million and enjoys one of the fastest growing GDP per capita in China.  GP Corp
reported revenue of around #425 million for 2005, operates eight depots and has
approximately 2,000 employees.  On completion of the transaction GP Corp is
expected to operate 29 retail pharmacies, this being the maximum permitted under
current regulations for a 50:50 foreign-invested joint venture such as GP Corp.

Alliance Boots' partner in the joint venture will be Guangzhou Pharmaceutical
Company Ltd, a majority state-owned pharmaceutical enterprise which is listed on
the Hong Kong and Shanghai stock exchanges.  Guangzhou Pharmaceutical Company
Ltd currently owns 90% of GP Corp.

The investment in GP Corp will be made through a UK subsidiary in which Beijing
Med-Pharm Corporation ("BMP") holds a 20% stake. BMP is a US-listed
pharmaceutical marketing and distribution company with existing operations and
significant experience in China.  The subsidiary will acquire a 50% interest in
GP Corp for a total consideration of around #38 million.  Alliance Boots and BMP
will fund the subsidiary pro-rata to their shareholdings.  Alliance Boots will
meet its investment from existing resources and will equity account for its
interest in the joint venture.

Commenting on the announcement, Richard Baker, Alliance Boots Chief Executive,
said: "This is an exciting deal for Alliance Boots and underlies our commitment
to be a major international player in pharmacy-led health and beauty.  The
Chinese market has good growth potential and this move demonstrates our belief
in the ability of the Group to drive growth through developing opportunities in
new markets."

Stefano Pessina, Executive Deputy Chairman of Alliance Boots, with
responsibility for strategy and M&A said: "The move into the Chinese market
demonstrates Alliance Boots' commitment to growing internationally and our
attractiveness to partners. China is an exciting and important market for us to
enter. This joint venture brings together strong local management and our
extensive experience in running pharmaceutical wholesaling businesses.  We
expect GP Corp to benefit from both the rapid expansion of the Chinese
healthcare market and further consolidation opportunities as they arise."

Yang Rongming, Chairman of the joint venture partner, Guangzhou Pharmaceutical
Company Ltd, said: "We are delighted to be forming this joint venture with such
an experienced international partner with proven excellence in the operation,
acquisition and integration of pharmaceutical distribution businesses."

The formation of the joint venture, which is conditional upon receiving
Guangzhou Pharmaceutical Company Ltd shareholder approval and various government
and regulatory approvals, is expected to be completed in the second half of 2007
and will expand Alliance Boots' wholesale presence to 15 countries.


                                     -Ends-



Editor's Notes:

Guangzhou Pharmaceutical Company Ltd is principally engaged in the manufacture
and sale of Chinese patent medicine; wholesale, retail, import and export of
western and Chinese pharmaceutical products and medical apparatus; and research
and development of natural medicine and biological medicine. Guangzhou
Pharmaceutical Company Ltd is a state-owned pharmaceutical enterprise under the
Guangzhou municipal government, the H shares of which were listed on the Hong
Kong Stock Exchange in 1997 and the A shares of which were listed on the
Shanghai Stock Exchange in 2001.  Currently Guangzhou Pharmaceutical Company Ltd
owns 90% of Guangzhou Pharmaceuticals Corporation which is engaged in
pharmaceutical wholesaling and distribution.

Beijing Med-Pharm Corporation (NASDAQ: BJGP) is a pharmaceutical marketing and
distribution company that offers the following services in China: pre-market
entry analysis; clinical trial management; product registration; market
research; pharmaceutical distribution to hospitals; and pharmaceutical marketing
to healthcare providers.


 Alliance Boots

Alliance Boots is a leading international pharmacy-led health and beauty group
which operates in both wholesale and retail.

It has a wholesale and distribution network serving over 125,000 pharmacies,
hospitals and health centres via 380 depots in 14 countries. Pharmaceutical
wholesaling businesses are in the Czech Republic, France, Italy, The
Netherlands, Norway, Russia, Spain and the UK. Associate pharmaceutical
wholesaling interests are in Egypt, Germany, Portugal, Romania, Switzerland and
Turkey.

In retail, Alliance Boots has a network of approximately 3,000 outlets in seven
countries, of which over 2,700 have pharmacies. Retail healthcare outlets are in
Republic of Ireland, Italy, The Netherlands, Norway, Thailand and the UK.
Associate retail healthcare outlets are in Italy and Switzerland.

Formed on 31 July 2006, Alliance Boots is listed on the London Stock Exchange
and employs around 100,000 people.

Merrill Lynch International acted as financial advisor to Alliance Boots.
Merrill Lynch International is acting exclusively for Alliance Boots in
connection with its investment in GP Corp and for no one else.


For further information, please contact:

Investor Relations
Gerald Gradwell/Chris Laud
Tel: +44 (0)20 7138 1118

Media
Donal McCabe
Tel: +44 (0)20 7138 1164


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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