What's happening with Farmacity: the chain is looking for a new partner and these are the reasons

The country's largest pharmacy chain, Farmacity , has begun a process to add a new partner with a passive investor profile.

According to sources close to the company, the transaction could include an IPO or obtaining special financing, although they ruled out a change in share control .

"We are preparing for an Argentina that will receive more investment in the coming years, to access the best sources of financing. There is nothing currently in the works that involves a change in share control," they clarified.

The newspaper LN reported that Farmacity granted a mandate to Bank of America to lead the negotiations, a fact confirmed to Clarín . The news is being interpreted in the business world as a warning for other companies evaluating similar strategies.

Farmacity offers multiple job opportunities in Mendoza. Photo: Courtesy of Farmacity

Since its creation in 1997 at the initiative of Mario Quintana, then at the Pegasus Fund, Farmacity transformed the pharmaceutical business in the country, both through its negotiating power with pharmaceutical companies and its financial capacity to offer promotions and payment plans. Its structure was similar to that of CVS in the United States, for example.

Currently, half of Farmacity's revenue comes from the sale of medications, although rising prices and the exclusion of certain drugs from discounts offered by PAMI, social security, and prepaid health insurance have affected consumption. The remaining sales are beauty products, cleaning products, candy, and toiletries.

Farmacity employs 8,200 people and has 350 points of sale in Argentina and Uruguay, in addition to 13 of its own brands.

However, it has not yet been able to enter the province of Buenos Aires due to Law 10,606, which prohibits the ownership of pharmacies by corporations.

The company overcomes this limitation with its Simplicity chain, specializing in personal care, fashion, home, and entertainment, in which it invested $2.1 billion last year to expand in the Buenos Aires province and is also present in other provinces.

The pharmaceutical sector is undergoing a process of concentration, with the rise of chains such as Central Oeste and the Venezuelan Farmatodo, which is growing through acquisitions and competing in an increasingly competitive market.