Sainsbury’s and Celesio, owner of LloydsPharmacy, has announced the formation of a strategic partnership that will see LloydsPharmacy acquire Sainsbury’s pharmacy business for £125m.

Sainsbury’s will receive commercial annual rent payments from LloydsPharmacy for each location.

Mike Coupe, chief executive of Sainsbury’s, said: “Working together with a specialist operator like LloydsPharmacy will enable us to grow and extend our pharmacy services to customers, whilst realising value for shareholders today from the pharmacy business we have grown organically over the last 20 years.”

Cormac Tobin, managing director of LloydsPharmacy and Celesio UK, added: "Sainsbury’s is a fantastic fit for LloydsPharmacy. We are both passionate about excellent customer service and making a positive impact on the communities we serve.

"Health is our focus and over recent years we have developed a range of services to make it easier for people to manage their health, such as our pain management and skin health services, and we look forward to making these even more accessible via the Sainsbury’s network.”

Under the terms of the transaction, LloydsPharmacy has agreed to acquire 281 pharmacies in total, including 277 in-store pharmacies and four located in hospitals, all of which will be rebranded as LloydsPharmacy.

The deal is expected to complete by the end of February next year, subject to regulatory conditions being satisfied.