Walgreens, the biggest U.S. drugstore chain, said it will buy the minority stake from China National Accord Medicines Corp. for about $416 million.
The Deerfield-based company said it will expand its global retail pharmacy operations by taking a 40 percent stake in Sinopharm Holding Guoda Drugstores Co. Ltd., a subsidiary of Chinae National Accord Medicines Corp.
Sinopharm GuoDa "operates and franchises retail pharmacies across China," a market that Walgreens CEO Stefano Pessina has said he wants to tap as the companies looks to faster growing and emerging markets to extend its reach.
"It is China's leading pharmacy chain," Walgreens Pessina said in a statement.
The deal comes when the Chinese government has been encouraging private investments and equity from abroad in its health care industry.
Healthcare expenditure in China is expected to reach $1.1 trillion by 2020, according to the U.S. Department of Commerce.
GuoDa, which operates and franchises 3,800 retail pharmacies across 70 cities in China, said the Walgreens investment would help its nationwide expansion plans. The company employs close to 20,000 people.
"We are delighted that we have received regulatory approvals and our investment agreement has now been completed," Pessina said. "We believe GuoDa holds a strong position in the sector, and as a global pharmacy-led health and beauty enterprise, we are well positioned to support its further growth ambition. We are looking forward to sharing our international best practices and pharmacy expertise. We believe there is great potential in working together to play a transforming role in the evolving Chinese retail pharmacy market."