Jan 7 (Reuters) - Australian Pharmaceutical Industries (API.AX) said on Friday conglomerate Wesfarmers Ltd would buy it for A$763.6 million ($546.9 million) after Woolworths pulled out of a race to acquire the country"s top drugstore chain. The news sent API"s shares tumbling 12.7% to A$1.51 in early trade, as Wesfarmers" A$1.55 per share offer was 20 cents a share lower than Woolworths" proposal. The deal will mark Wesfarmers" first foray into the pharmacy sector, giving it access to API"s network of retail stores, skincare clinics, and a distribution network of pharmaceutical and healthcare products. Woolworths, in a separate statement, said it had "not been able to validate the financial returns it requires in line with the group"s capital allocation framework" to proceed with its proposal. Wesfarmers, which already owns 19.3% of API, said last month it would not back Woolworths" bid for the pharmacy chain. In early November, Sigma Healthcare also dropped a A$773 million takeover bid for API. read more The deal with Wesfarmers was on track to be completed in the first quarter of 2022, API said. ($1 = 1.3963 Australian dollars)