McKesson to sell Brazilian pharmaceutical distribution business
Tuesday, February 02, 2016
McKesson Corp. said Monday it had agreed to sell its Brazilian pharmaceutical distribution business, reflecting overall weakness in the country's economy and the drug distributor's focus on Europe.
The company will sell the distribution business to Brazil's SC Participações Empresariai. The purchase price was not disclosed.
The company anticipates an after-tax impairment charge of about $70 million to $90 million on the sale. The deal, subject to closing conditions, is expected to wrap up during the first fiscal quarter of 2017, which is when the most of the impairment charge will be recognized.
Brazil's government has struggled to revive a weak economy amid political gridlock as its debt ballooned. The country's gross domestic product is expected to shrink 3.01% this year, and economists expect only anemic growth in 2017.
In September, McKesson agreed to buy certain Ireland and U.K. businesses from UDG Healthcare PLC in Dublin. The deal was valued at 407.5 million euros and included pharmaceutical distribution, home health-care and travel health-care operations.
McKesson's stock, down 18% in the past month, was inactive premarket.
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