AmerisourceBergen to Buy Walgreens Unit for $6.5 Billion

AmerisourceBergen Corp. agreed to buy Walgreens Boots Alliance Inc.’s pharmaceutical wholesale businesses for about $6.5 billion in cash and stock, extending the U.S. drug distribution giant’s reach in Europe.

The deal for Walgreens’s Alliance Healthcare includes $6.275 billion in cash and 2 million in shares, the companies said in a statement Wednesday. In addition, Walgreens and AmerisourceBergen extended existing distribution agreements in the U.S. and the U.K. by several years, furthering their already close ties. Walgreens is AmerisourceBergen’s biggest shareholder with a stake of 30%.

With Alliance Healthcare, AmerisourceBergen will strengthen its global reach, while Walgreens will focus on its main pharmacy business. Walgreens, based in Deerfield, Illinois, is among the pharmacy chains that partnered with the U.S. government’s vast effort to administer Covid-19 shots in nursing homes.

This was the second large acquisition in just a few hours in the health-care industry Wednesday. UnitedHealth Group Inc. earlier agreed to purchase Change HealthcareInc. in a deal that values the health technology company at about $8 billion.

AmerisourceBergen rose 4.8% in early U.S. trading, while Walgreens gained 2.1%.

In a separate statement, AmerisourceBergen boosted its earnings forecast for the fiscal 2021 year that ends in September. The Chesterbrook, Pennsylvania-based company now sees earnings per share of $8.25 to $8.50, excluding some items, up 5 cents from its previous range.

Walgreens’s Alliance Healthcare businesses had combined revenue of about $19 billion in 2020, and adjusted earnings before interest, tax, depreciation and amortization of $540 million.

The acquisition, which excludes Walgreens operations in China, Italy and Germany, is expected to close by the end of by AmerisourceBergen’s fiscal year.

JPMorgan Chase & Co. advised AmerisourceBergen on the deal, and Cravath, Swaine & Moore LLP, Hogan Lovells International LLP and Morgan, Lewis & Bockius LLP were legal advisers. Centerview Partners was Walgreens’ financial adviser, while Cleary Gottlieb Steen & Hamilton LLP and Baker McKenzie LLP provided legal support.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.