Canadian regulators call for 26 Rexall stores to be divested
SAN FRANCISCO — McKesson Corp. has been given the green light from the Competition Bureau of Canada to finalize its $2.2 billion acquisition of drug chain Rexall Health.
McKesson said Wednesday that under the consent agreement it signed with the bureau, it must sell a total of 26 Rexall drug stores in Alberta, British Columbia, Ontario, Saskatchewan and the Northwest Territories.
The affected Rexall stores are required to be sold to new owners, McKesson said, adding that it doesn’t expect to close any of the stores because of the divestitures.
Pending certain closing conditions, the acquisition transaction is slated to be closed “as expeditiously as possible,” McKesson stated. The company’s deal with Katz Group Canada Inc. — which includes Rexall Health’s Rexall/Pharma Plus pharmacies, Medicentres Canada and Claimsecure Inc. — was announced in early March.
“We are pleased to have received regulatory approval from the Competition Bureau of Canada,” Paul Julian, executive vice president and group president at McKesson, said in a statement. “Together, McKesson and Rexall Health will continue to deliver choice and access, integrated pharmacy care and industry-leading service levels.”
The purchase will bring about 470 Rexall/Rexall Pharma Plus drug stores, located in six provinces and one territory, to McKesson Canada, whose network includes approximately 1,700 independent pharmacies under various banners across Canada.
The Rexall stores to be divested are located in Athabasca, Banff, Barrhead, Blairmore, Fort MacLeod, High Prairie and Jasper, Alberta; Burns Lake, Ladysmith, Sechelt and Vanderhoof, British Columbia; Campbellford, Deep River, Durham, Englehart, Iroquois Falls, Lindsay, Sioux Lookout, Smithville, Stayner, Sturgeon Falls and Wingham, Ontario; Kamsack, Moosomin and Shaunavon, Saskatchewan; and Inuvik, Northwest Territories.
With the addition of Rexall’s stores, McKesson Canada will have a network of roughly 2,150 drug stores and be the seventh-largest retail pharmacy player in North America.
McKesson already is Canada’s largest pharmaceutical distributor, carrying more than 55,000 products in 13 distribution centers and supplying about 7,100 pharmacies.