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Temasek in talks for US$1b sale of Zuellig Pharma stake: sources

Interested buyers may include Swiss rival DKSH, as well as Mitsui which is expanding its healthcare operations

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Temasek Holdings is exploring a sale of its stake in Asian drug distributor Zuellig Pharma, people familiar with the matter said.

Hong Kong

TEMASEK Holdings is exploring a sale of its stake in Asian drug distributor Zuellig Pharma, people familiar with the matter said.

The Singapore investment company has been speaking to advisers about a potential sale of its 20 per cent stake in Zuellig Pharma, which commands vast pharmaceutical distribution networks in about a dozen Asian markets, according to the sources.

Temasek may seek around US$1 billion for its holding in the Singapore-based company, the sources said, asking not to be identified because the discussions are private.

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The stake could draw interest from strategic buyers including Mitsui & Co, the Japanese trading house that has been expanding its health care operations, as well as private equity firms, the sources said.

Zuellig Group was founded in 1922 by businessman Frederick Zuellig, who moved to Manila from Switzerland. The family trading house built out a number of different businesses and now has interests ranging from healthcare and pharmaceuticals to insurance and property, according to its website.

Zuellig Pharma had US$10 billion in sales in 2015 generated by its 10,000 employees.

Temasek first invested in Zuellig Pharma in 2007. Deliberations are at an early stage, and there is no certainty that they will lead to a transaction, the sources said.

Representatives for Temasek and Mitsui declined to comment, while a representative for Zuellig Pharma said that she could not immediately comment.

The death of family patriarch Stephen Zuellig in January fuelled speculation that his group could be put on the block.

Stefan Butz, chief executive officer of Swiss rival DKSH Holding AG, said in July that he would be interested in starting talks if Zuellig Pharma officially came up for sale.

"It's one of our key competitors, because they are particularly strong in the Philippines and in Indonesia and even the other markets," Mr Butz said in response to an analyst question on an earnings conference call.

"We assume that they are dealing with the recent changes, and making up their minds how they want to take the company forward."

A representative for DKSH declined to comment. BLOOMBERG

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