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McKesson snags part of Canada’s Katz GroupGetty Images/iStockphoto

U.S. health care giant McKesson Corp. is buying a big part of Edmonton-based drug store operator Katz Group Canada Inc. for $920-million.

The California-based company announced late Monday it will acquire the independent outlets and franchise businesses of Katz, a privately held company.

Those mainly operate as I.D.A. and Guardian brands across Canada.

Daryl Katz, chairman of the Katz Group, said the sale involves non-core businesses and will not affect the company's corporate drug chains such as Rexall and Pharma Plus.

"This transaction unlocks significant value through the sale of two outstanding but non-core assets," the Katz Group chairman said in a separate release from Toronto.

"We will intensify our focus on our corporately owned Rexall and Rexall/Pharma Plus store network to accelerate the growth of our Rexall brand and the value proposition that it represents to our patients and customers. We will also accelerate the growth of our related real estate interests."

San Francisco-based McKesson says it expects to pay the $920-million price tag from its available cash balances.

The independent drug stores acquired operate under the Drug Trading Co. Ltd. name and consist of about 850 I.D.A. and Guardian pharmacies.

Medicine Shoppe, the franchise business, provides services to 160 independent pharmacies in Canada.

McKesson has been the primary pharmaceutical distributor to both for years. The company also operates drug store chains such as Proxim, Associated Retail Pharmacy and Family Health Care Pharmacy.

Those outlets are owned and managed by pharmacists and supplied and aided by McKesson.

The deal is expected to close in the first half of this year, assuming it passes regulatory hurdles.

"The anticipated addition of the banner and franchise operations of Katz Group to our Canadian business reinforces McKesson's ongoing commitment to the independent segment," chairman and CEO John Hammergren said in a release after stock markets closed Monday.

"This acquisition is a great example of using the strength of our balance sheet to reinforce the value we bring to our customers, while creating value for our shareholders."

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