AmerisourceBergen and Walgreens Boots Alliance Strategic Transaction

AmerisourceBergen and Walgreens Boots Alliance Strategic Transaction

AmerisourceBergen Corporation and Walgreens Boots Alliance, announced strategic agreements under which AmerisourceBergen will acquire the majority of Walgreens Boots Alliance’s Alliance Healthcare businesses for approximately $6.5 billion, comprised of $6.275 billion in cash and 2 million shares of AmerisourceBergen common stock.

“AmerisourceBergen’s acquisition of Alliance Healthcare will provide even stronger support for pharmacies and pharmacists across the globe and integrated solutions for pharmaceutical manufacturers. Walgreens Boots Alliance will be able to increase its focus on expanding its core retail pharmacy businesses, bringing even greater healthcare offerings to patients and customers and further accelerating its progress on its clear set of strategic priorities,” – the AmerisourceBergen said.

More About AmerisourceBergen and Walgreens Deal

The companies have agreed to strengthen their strategic partnership by extending and expanding their commercial agreements. Their U.S. distribution agreement will be extended by three years until 2029 and their partnership is being expanded to include a commitment to pursue additional opportunities in sourcing and distribution. Furthermore, Alliance Healthcare UK will remain the distribution partner of Boots until 2031. Together, these agreements are expected to create incremental growth, synergies and efficiencies.

“This strategic agreement with AmerisourceBergen, which we consider to be the world’s leading pharmaceutical wholesaler, is a very positive development for the two companies. This deal will enable significant value creation for both companies and will generate new synergies in addition to those already captured. It is a logical step following the success of our long-term strategic relationship with AmerisourceBergen which has been a strong and trusted partner since 2013,” said Stefano Pessina, Executive Vice Chairman and CEO, Walgreens Boots Alliance.

“The transaction will fuel higher future investments to grow and transform our core retail pharmacy and healthcare businesses, and is EPS accretive long-term for Walgreens Boots Alliance.”

These announcements between the two global enterprises continue to build on the close partnership and strong foundation that began in 2013. Walgreens Boots Alliance is the largest shareholder of AmerisourceBergen with a stake of nearly 30 percent, and Ornella Barra, Co-Chief Operating Officer, Walgreens Boots Alliance, is a Board Member of AmerisourceBergen.

Transaction Details

Under the terms of the purchase agreement, which has been approved by the AmerisourceBergen and Walgreens Boots Alliance Boards of Directors, AmerisourceBergen will pay WBA $6.275 billion in cash, subject to a customary working capital and net-debt adjustment, and deliver 2 million shares of AmerisourceBergen common stock at closing of the transaction.

Upon closing, the acquisition of Alliance Healthcare is expected to deliver high-teens percentage accretion to AmerisourceBergen’s adjusted diluted EPS in the first fiscal year. AmerisourceBergen expects synergies from the acquisition of Alliance Healthcare to ramp to an annual run-rate of $75 million in the fourth year. Adjusted free cash flow of the combined AmerisourceBergen and Alliance Healthcare businesses are expected to increase to 125% of AmerisourceBergen’s stand-alone estimates.

“AmerisourceBergen’s vital role in the health system as a key pillar of pharmaceutical innovation and access has been on full display over the past year,” said Steven Collis, Chairman, President & Chief Executive Officer of AmerisourceBergen.

“AmerisourceBergen’s financial and strategic position enable this next evolution of enhancing our ability to provide healthcare capabilities across regions and deliver innovative solutions for our upstream and downstream partners. Today’s announcements will expand our reach and solutions in pharmaceutical distribution and add to AmerisourceBergen’s breadth and depth of global manufacturer services, supporting our ability to create differentiated value for all our stakeholders.

I look forward to extending and expanding our successful partnership with Walgreens Boots Alliance and welcoming the industry-leading team at Alliance Healthcare to AmerisourceBergen. Together, we will fulfill AmerisourceBergen’s purpose of being united in our responsibility to create healthier futures.”

Oleg Kasenkov

Oleg Kasenkov has an experience of helping people to make the most efficient healthcare decisions. For a long time, he helped people to locate the best healthcare professional for their particular need and assisted in saving money on prescription drugs. On the top of that, he used to work with medical insurance plans and consulting patients on their medical coverage.

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