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Celesio shares surge on talk of McKesson bid

* McKesson may offer premium of up to 30 pct -Dow Jones

* Sources tell Reuters McKesson in advanced talks

* Celesio CEO says "no urgent need" for alliance, tie-up

* Celesio shares jump as much as 21 percent

By Frank Siebelt and Sophie Sassard

FRANKFURT/PARIS, Oct 8 (Reuters) - Largest U.S. drug distributor McKesson is in advanced talks to buy European rival Celesio for a possible 3.74 billion-euros ($5.1 billion), a media report said on Tuesday, sending the German company's shares surging as much as 21 percent.

A deal involving Celesio, one of Europe's largest drugs wholesale groups, has been brewing for some time as the top U.S. drugs distributors seek to boost their purchasing muscle with global drugs companies and get more pricing power.

Celesio, active in both drugs wholesale and retail, has sped up the expansion of its network of pharmacies in continental Europe under the Lloyds brand, but has faced a price war among German drugs distributors.

Industry sources familiar with the situation have told Reuters that Celesio was in talks on McKesson or rival Cardinal Health taking a stake in Celesio and with U.S. drugstore chain CVS Caremark over joint purchasing.

Two people close to the matter told Reuters on Tuesday that McKesson was nearing a decision on whether to bid.

News agency Dow Jones on Tuesday cited people familiar with the matter as saying that if U.S.-based McKesson decides to make a bid, it could offer a premium of up to 30 percent, or close to 22 euros per share, in a report also published by sister brand The Wall Street Journal Online.

The Reuters sources said the largest U.S. drug distributor could baulk at paying the mooted premium.

Celesio and majority owner Franz Haniel & Cie declined to comment.

McKesson was not immediately available for comment.

Celesio shares closed 20 percent higher at 20.49 euros, a more than 3-1/2 year high.

"The market will no doubt want to speculate that both CVS and Cardinal are potential counter bidders for Celesio," Olivetree analyst Mark Kelly wrote in a note to investors.

McKesson shares jumped 4.8 percent.

In an interview with daily Boersen-Zeitung, CEO Marion Helmes said there was "no urgent need" for an alliance or tie-up with a U.S. partner but such a deal could boost purchasing power to get better discounts from generic drugmakers.

Dow Jones said that under a likely deal structure, San Francisco-based McKesson would launch a voluntary takeover offer for all Celesio shares, with Franz Haniel, which owns just over 50 percent, having agreed to tender its stake.

McKesson has gained access to the books of Celesio, Dow Jones said, adding that the company may announce a bid as early as this month if it decides to go ahead.

The three largest drugs distributors in the United States, AmerisourceBergen, Cardinal and McKesson, which between them account for 95 percent of the U.S. market, are all looking to grow abroad to gain purchasing power with drug makers.

In March, pharmacy chain Walgreen Co and its European partner Alliance Boots signed a 10-year purchasing deal with AmerisourceBergen.