Walgreens Alliance sells majority of healthcare pharmacy business to AmerisourceBergen for $ 6.5 billion deal

Walgreens Footwear Alliance Inc., WBA
+ 4.15%
On Wednesday, it announced that it had spent the majority of its Alliance healthcare business as pharmaceutical products and services provider AmerisourceBergen Corp. ABC, has sold.
+ 7.57%
In a $ 6.5 billion deal.

The transaction consists of $ 6.275 billion in cash and two million shares of Amersorgbergen common stock. It is expected to close by the end of fiscal 2021 of AmerisourceBergen.

Revenues for businesses totaled $ 19 billion in FY 2020.

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In a statement, the companies say that the deal will provide support for pharmacies and pharmacists through Amerschorsburg, and Walgreens will now be free to expand its focus to its main retail pharmacy business.

The deal also expands AmerisourceBergen’s business in Europe.

The two companies have partnered since 2013, and are the largest shareholder of Walgreens AmerisourceBergen with a 30% stake.

The news sent Walgreens shares up 3.3% in Wednesday trading, while AmerisourceBergen shares jumped 7.5%.

In addition to pharmacy transactions, the two companies have extended their US distribution agreements for three years to 2029, with annual run-rate synergies expected to reach $ 150 million, which will be shared equally by both companies. And Alliance Healthcare UK will continue as a Walgreens distribution partner until 2031.

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The deal is expected to add to AmerisourceBergen’s adjusted earnings per share in the first financial year.

Walgreens expects the transaction to be “slightly diluted” in the current financial year and increase over the long term.

AmerisourceBergen also updated its FY2021 guidance, adjusting EPS in the range of $ 8.25 to $ 8.50 to $ 8.45 from its previous guidance of $ 8.20.

The updated guidance does not include contributions from the Alliance Healthcare deal with Walgreens.

The FactSet consensus stands for EPS of $ 8.42.

Walgreens stock declined 28.5% over the previous year. AmerisourceBergen has gained 23.2%. Benchmark S&P 500 Index SPX,
+ 1.18%
16% for the period.


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