FORM 20-F Grupo Casa Saba, S.A.B. de C.V.

Table of Contents
Overview
As part of our strategy to expand our retail pharmacy operations, on May 17, 2010 we entered into a Stock Purchase and Sale Agreement, or the FASA Agreement,
with a group of entities controlled by Mr. Jose Codner Chijner to acquire up to 100% of the capital stock of Farmacias Ahumada, S.A., or FASA, for a total price of approximately $637
million, including the assumption of net debt that, as of March 31, 2010 was $162 million. FASA is the largest retail pharmacy chain in Latin America, with annual sales of approximately
U.S.$1,691 million in 2010 and over 1,260 pharmacies in Chile, Mexico and Peru. The transaction was subject to the completion of a tender offer for all of the outstanding shares of
FASA on the Santiago Stock Market, at a price of 1,642 Chilean Pesos per share, and the validity of such offer was conditioned upon the acquisition of at least 50% plus one of the
outstanding shares of FASA. The Acquisition was also subject to the approval of our general shareholders meeting and the Mexican Antitrust Commission, Comision Federal de
Competencia.
On July 21st, 2010, our shareholders approved the Acquisition by ratifying the execution of the FASA Agreement. Additionally, our shareholders authorized the
Company to launch a tender offer, directly or indirectly through one of its subsidiaries, for up to all of the shares that represented the capital stock of FASA, and to carry out all
necessary acts, including the granting of collateral, in order for the Company to obtain the necessary resources to finance the Acquisition.
On August 30, 2010, the Company entered into the Acquisition Loan Certain subsidiaries of the Company executed the Acquisition Loan as joint obligors. HSBC
Mexico and HSBC Bank (Chile) were appointed as collateral agents in their respective countries. The Acquisition Loan provides for a series of covenants which, among other things,
restrict the ability of the Company and the joint obligors to: (i) incur, assume or allow the existence of indebtedness, (ii) create liens, (iii) consolidate, merge or transfer assets, (iv) sell
assets, including capital stock, of our subsidiaries, (v) make loans, (vi) modify the nature of our business, (vii) pay dividends on our capital stock or redeem, repurchase or retire our
capital stock, (viii) make investments; and (ix) create any consensual limitation on the ability of our subsidiaries to pay dividends, make loans or transfer any distribution to us; among
other customary covenants and provisions. See “Item 4. Information on the Company—History and Development of the Company.”
As publicly disclosed by the Company on August 10, 2011, we entered into an Amendment Agreement with regard to the Acquisition Loan dated August 30, 2010, by
means of which Grupo Casa Saba had secured the requisite funds to complete the Acquisition. The effectiveness of such agreement was subject to the satisfaction of certain conditions
precedent, all of which were satisfied by GCS in September 2011. The Amended and Restated Acquisition Loan includes the affirmative and negative covenants that are customary for
this type of transaction.
As part of the evolution of our business model, Grupo Casa Saba has decided to concentrate its efforts on its expansion in Mexico, Chile and Brazil. As a result, in
early 2012 it completed a series of negotiations with Quitafex, SA, which resulted in the sale of our operations in Peru through the disposal of the equity of our subsidiaries in Farmacias
Peruana S.A. and Droguería La Victoria S.A., vehicles through which we conducted our operations in Peru. Part of the agreements reached with Quitafex, S.A. resulted in a 5 year noncompetition
period for Grupo Casa Saba and its subsidiaries to develop operations related to the supply of drugs in Peru and Bolivia, countries that, for the moment, are not part of our
strategic expansion plan.
In 2011, the Group’s consolidated net sales were Ps. 46,568 million compared to Ps. 33,840.8 million in 2010. This increase was primarily the result of the consolidation
of FASA’s sales into our Group. However, given that we purchased FASA in October 2010, only its fourth quarter sales were reflected in our 2010 net sales. Therefore, this figure is
not comparable with our 2011 sales, when a full twelve months of FASA’s sales were consolidated into the Group’s total sales.
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