Source: Valor Econômico - SP, 08/07/2009

Panarello, the country's largest drug distributor, had its control negotiated with the German group Celesio. The transaction will be officially announced next week. The German group, which operates in 14 countries, will acquire 54% of the shares of the Panpharma group. In addition to Panarello, the acquisition will include distributors American Farma and Sudeste Farma.

Celesio will have the option to increase this share in the future. Despite losing control of the company, the Panarello family will remain at the forefront of management. Alexandre Panarello, the group's general director, will be the president of the company while his parents, Paulo Panarello Neto and Ester, will take seats on the company's board of directors and management committees. The Germans will appoint two directors.

The Brazilian group was founded in 1975, earned R $ 3 billion in 2008, serves 30 thousand pharmacies and has 17% of the wholesale market. Headquartered in Goiânia, the group grew with fat tax incentives offered by the government of Goiás.

The intention of the two groups is not to reveal the value of the deal, which could reach R $ 300 million to R $ 500 million, according to experts consulted by Valor. Panpharma's press office confirmed the negotiation, saying the final details are being worked out and the group would not give an interview to talk about the matter. In a message sent to employees after news of the deal leaked through German newspapers, Panarello Neto said that the funds from the capital contribution will be “fully invested in the company in order to accelerate the growth strategy and, consequently, consolidate the group as absolute leader in the pharmaceutical distribution market in Brazil. ”

If completed, the transaction will mark the entry of foreign capital in the distribution of medicines in the country. In August, the British Alliance Boots announced the purchase of 25% of Athos Farma, the fourth largest in the sector, but withdrew from the deal in April due to the difficulties faced by the Brazilian group.

“The Brazilian pharmaceutical market is changing and passing through the crisis due to the improvement in the purchasing power of classes C, D and D”, says Nelson Mussolini, from the consultancy Mussolini Assessoria em Negócios and former director of Novartis in Brazil. The consultant foresees changes in the wholesale market with a reduction in the number of companies in the sector.

About three hundred companies operate in the segment, but the concentration has been increasing. Experts estimate that the largest in the sector have more than 40% of sales volume. The companies linked to the Brazilian Pharmaceutical Wholesale Association (Abrafarma) moved R $ 16,7 billion in 2008.

The siege of the tax authorities is another factor that has helped to change the face of the sector. The adoption of tax substitution by the São Paulo government increased the costs of distributors' inventory management. “Wholesalers who enjoyed lower rates in the sale of medicines had a tight cash flow with the introduction of fiscal changes. This was good because it created a more relaxed atmosphere to work ”, says the president of a pharmaceutical laboratory.

The Celesio group, which earned € 21,8 billion in 2008, has its main operations in Germany, France, England and Portugal. Employing 37 people, the group, based in the German city of Stuttgart, has 2.300 own pharmacies.