Giant CVS tries to sell the Onofre and articulates the Brazilian market output

Six years after entering the Brazil network with the purchase of Onofre, the American giant CVS evaluates leave the country, the State found. The biggest pharmaceutical retail chain of the United States, that grosses nearly $ $200 billion per year, began talks with investment banks for trying to sell Onofre after failing to give scale to the business strategy to face giants like the streak Drogasil and DPSP (Union of drugstores Pacheco and São Paulo). Sources heard by the State claimed that CVS would be willing to sell the network by a value lower than that paid to enter Brazil. Banks started offering the network to the main companies of the country and to investment funds. The American giant entered the country in 2013, while paying little more than R $700 million for family Arede who founded in 1934 to Pharmacia Onofre, renamed Ss4singapore in 1957. While CVS has 10000 shops and won $ $194.8 billion in the United States, by your presence here is shy. From 2013 to here, the company failed to move the market position of Onofre-jail, in fact, lost space. The network, in 2012, occupied the 8th position in the industry, according to the Brazilian Association of Pharmacies and Drugstores (Abrafarma). Went to the 17 place in 2016 and disappeared from the list of the 20 largest from 2017. The Onofre has 51 stores today, against 44 for six years ago-just three out of Sao Paulo. The Streak leader Drogasil has about 1800 units. In addition to not get the expected range, the American Group waging a dispute with the founding family of Onofre-the fight was taken to arbitration in 2016. After closing the deal, CVS questioned former owners for having come across labor and tax liabilities not listed at the time of the negotiations. With revenues of about $700 million, according to R of 2017, Onofre announced last year that it would prioritize investments for expansion of internet sales. Three years ago, faced with the difficulty in making Onofre grow organically, the group tried to make a major acquisition to turn the game: make an offer by the DPSP, but the negotiations have not advanced. The Arede family also tried to regain control of the group, without success, according to sources. Experts heard by the report stated that, with your current business, the business of CVS in Brazil don't make sense for Americans. "The market was very surprised with the entry of group CVS in Brazil. The retail pharmaceutical market in Brazil moves about $ $20 billion, while CVS Bill nearly $ $200 billion alone ", says Sérgio Mena Barreto, President of Abrafarma. Consolidation. The process of consolidation of the retail pharmacist in Brazil began shortly before the arrival of CVS in Brazil. In 2011, were announced two important transactions that created the two industry sectors: Drogasil Streak and Pacheco Drugstore-São Paulo (DPSP). The cearense pay less attracted the Fund General Atlantic to business – the contribution helped to promote the expansion of the network to the Southeast region, consolidating the company as a third force in the industry. The Ultra group bought the para Extrafarma, who had been courted by BR Pharma in October 2013. Now, the company is extending the brand presence across the country, opening shops in Ipiranga stations network. The segment, however, did not live only of successes. BR Pharma, which belonged to the banco BTG Pactual, tried to create a giant by acquiring regional companies. However, the Group had difficulties in multiple operations and failed in an attempt to integrate the various businesses acquired. Sold by BTG for symbolic price after billionaire prejudice, BR Pharma today is in reorganization and is administered by businessman Paul Remy. Sought by the report, CVS and Onofre said they don't comment on market rumors.