United Drug buys cross-border rival

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The Independent Online
UNITED DRUG, based in Dublin, has been tempted into taking over Alchem, a rival pharmaceutical company across the border in Northern Ireland, despite saying earlier this year that acquisitions were no longer a priority.

Jerry Liston, chief executive, said the company had decided to deviate from a path of organic growth after Alchem approached United with a view to merging.

The Ir pounds 5.16m takeover meant United could pursue its policy of becoming the largest operator in all Ireland, he added.

Although Alchem controls about 45 per cent of the drugs wholesaling market in Northern Ireland, it is considerably less profitable than United. In the year to 31 March it made pounds 737,000 before tax from pounds 44.6m of sales, compared with United's Ir pounds 2.7m on Ir pounds 63m of turnover in the 12 months to last September.

Alchem is a public, but non-listed, company. Its articles of association, which will have to be changed, dictate that only retail pharmacists can be shareholders.

All of Alchem's directors and certain members of their families have pledged their 18 per cent of shares to United. More than a third of the retail pharmacists in Northern Ireland are shareholders in Alchem.

United is offering 13 of its shares, which held at 178p yesterday, for every eight held in Alchem. There is also a 3p-a-share loyalty bonus for Alchem shareholders who hold on to United's paper for three months.

Mr Liston said Alchem would be a autonomous unit within United. John White, chairman of Alchem, and Stephen Simms, joint managing director, will join United's board.