Walgreens Plans To Sell Drug Wholesale Business For $6.5B

Deerfield IL

06 January, 2021

12:13 PM

Description

DEERFIELD, IL — In a transaction expected to be completed by fiscal year-end 2021, Walgreens Boots Alliance announced Wednesday it is selling Alliance Healthcare businesses for approximately $6.5 billion to pharmaceutical wholesaler AmeriscourceBergen. According to the Deerfield-based company, the move will "provide even stronger support for pharmacies and pharmacists across the globe and integrated solutions for pharmaceutical manufacturers." In addition to this transaction, the two companies have agreed to strengthen their strategic partnership by extending and expanding their commercial agreements, according to a release. 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. "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," said Stefano Pessina, executive vice chairman and CEO of Walgreens Boots Alliance, in a statement. "This deal will enable significant value creation for both companies and will generate new synergies in addition to those already captured." Pessina added that the move is the next "logical" step following the success of the company's long-term strategic relationship with AmerisourceBergen, which began in 2013. Walgreens Boots Alliance is the largest shareholder of AmerisourceBergen, based out of Pennsylvania, with a stake of nearly 30 percent. Coronavirus Vaccine Ready For Public By March, Walgreens Predicts Walgreens Boot Alliance oversees 9,277 Walgreens and Duane Reade stores in the U.S. The company also announced Alliance Healthcare UK will remain its distribution partner until 2031. "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," Pessina said. The transaction is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals, according to the release. Walgreens Boots Alliance's operations in China, Italy and Germany are not part of this transaction. Related:Walgreens Boot Alliance Posts 'Stronger Than Expected' Q4 NumbersWalgreens CEO Stepping DownWalgreens Lost $1.7 Billion Amid Coronavirus PandemicWalgreens To Open Doctors' Offices In 500-700 Stores