On February 13, 2017, McKesson Corporation (the Company)
entered into an Underwriting Agreement with the several underwriters named therein (the Underwriters), pursuant to which the Company agreed to issue and sell to the Underwriters 600,000,000 aggregate principal amount of its 0.625%
Notes due 2021 (the 2021 Euro Notes) and 600,000,000 aggregate principal amount of its 1.500% Notes due 2025 (the 2025 Euro Notes and, together with the 2021 Euro Notes, the Euro Notes). In addition, on
February 13, 2017, the Company entered into an Underwriting Agreement with the Underwriters pursuant to which the Company agreed to issue and sell to the Underwriters £450,000,000 aggregate principal amount of its 3.125% Notes due 2029
(the 2029 Sterling Notes and, together with the Euro Notes, the Notes). On February 17, 2017, the Notes were issued pursuant to the Indenture, dated as of December 4, 2012 (the Indenture) between the
Company and Wells Fargo Bank, National Association, as trustee (the Trustee), as supplemented by an Officers Certificate, dated as of February 17, 2017, setting forth certain terms of the Notes (the Officers
Certificate).
The 2021 Euro Notes will bear interest at the rate of 0.625% per year, the 2025 Euro Notes will bear interest at
the rate of 1.500% per year and the 2029 Sterling Notes will bear interest at the rate of 3.125% per year. Interest on the 2021 Euro Notes is payable on August 17 of each year, beginning on August 17, 2017. Interest on the 2025
Euro Notes is payable on November 17 of each year, beginning on November 17, 2017. Interest on the 2029 Sterling Notes is payable on February 17 of each year, beginning on February 17, 2017. The 2021 Euro Notes will mature on
August 17, 2021, the 2025 Euro Notes will mature on November 17, 2025 and the 2029 Sterling Notes will mature on February 17, 2029. Upon 30 days notice to holders of the applicable series of the Notes, the Company may redeem any
series of the Notes for cash in whole, at any time, or in part, from time to time, prior to maturity, at redemption prices that include accrued and unpaid interest and a make-whole premium, as specified in the Indenture and the Officers
Certificate. The Indenture and the Officers Certificate include certain covenants, including limitations on the Companys ability to create certain liens on its assets or enter into sale and leaseback transactions with respect to its
properties, or consolidate, merge or sell all or substantially all of its assets, subject to a number of important exceptions as specified in the Indenture. The Notes are unsecured and unsubordinated obligations of the Company and rank equally with
all of the Companys existing and future unsecured and unsubordinated indebtedness from time to time outstanding. The Indenture contains customary event of default provisions. In the event of the occurrence of both (1) a change of control
of the Company and (2) a downgrade of a series of Notes below an investment grade rating by each of the Ratings Agencies (as defined in the Officers Certificate) within a specified period, unless the Company has previously exercised its
optional redemption right with respect to that series of Notes in whole, the Company will be required to offer to repurchase the Notes of that series from the holders at a price in cash equal to 101% of the then outstanding principal amount of such
series of Notes, plus accrued and unpaid interest to, but not including, the date of repurchase.
The public offering price of the 2021
Euro Notes was 99.872% of the principal amount, the public offering price of the 2025 Euro Notes was 99.289% of the principal amount and the public offering price of the 2029 Sterling Notes was 99.879% of the principal amount. The Company expects to
receive aggregate net proceeds from the offerings of the Notes after estimated expenses of approximately $1.8 billion and to use such net proceeds for general corporate purposes, including repayment of $500 million aggregate principal
amount of its 5.70% Notes due March 1, 2017, $700 million aggregate principal amount of its 1.29% Notes due March 10, 2017 and 500 million aggregate principal amount of its 4.50% Bonds due April 26, 2017.
The Notes were offered and sold pursuant to the Companys automatic shelf registration statement on Form
S-3
(Registration
No. 333-215763)
under the Securities Act of 1933, as amended. The Company has filed with the Securities and Exchange Commission (the
SEC) a prospectus supplement, dated February 13, 2017, with respect to the Euro Notes and a prospectus supplement, dated February 13, 2017, with respect to the 2029 Sterling Notes, together with the accompanying prospectus,
dated January 27, 2017, relating to the offering and sale of the Notes.
For a complete description of the terms and conditions of the
Officers Certificate, the Notes and the Underwriting Agreements, please refer to the Officers Certificate, the form of the 2021 Euro Notes, the form of the 2025 Euro Notes, the form of the 2029 Sterling Notes and the Underwriting
Agreements, which are incorporated herein by reference and attached to this Current Report on Form
8-K
as Exhibits 4.1, 4.2, 4.3, 4.4 and 99.1 and 99.2, respectively.
In reviewing the agreements included as exhibits to this Current Report on Form
8-K,
please remember they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the
agreements. The agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement
and:
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should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
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may have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures would not necessarily be reflected in the agreement;
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may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
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were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.
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Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other
time. Additional information about the Company may be found elsewhere in this Current Report on
Form 8-K
and our other public filings, which are available without charge through the SECs website at
http://www.sec.gov.
From time to time in the ordinary course of their respective businesses, certain of the Underwriters, the Trustees and
their respective affiliates have engaged in and may in the future engage in commercial banking, derivatives and/or financial advisory, investment banking and other commercial transactions and services with the Company and its affiliates for which
they have received or will receive customary fees and commissions.
Shareholder Derivative Complaint
On January 31, 2017, a purported shareholder derivative complaint (
Silverman v. McKesson Corporation et.al.
,
No. 3:17-cv-00494-LB)
was filed in the United States District Court for the Northern District of California
against certain
directors and officers of the Company. The complaint also names the Company as a nominal
defendant. The complaint asserts that the defendants violated their respective fiduciary duties of care, loyalty and
good faith to the Company and
were unjustly enriched, in each case by disseminating allegedly materially
misleading and inaccurate information about the Company through public disclosures and allegedly failing to
implement and monitor internal controls relating to
the claims underlying the Companys previously-announced
agreement with the Drug Enforcement Administration, Department of Justice and various U.S. Attorneys offices
to settle certain potential administrative and civil
claims relating to investigations about the Companys
suspicious order reporting practices for controlled substances. The complaint seeks unspecified damages
including restitution and disgorgement of all profits, benefits and
other compensation obtained by the defendants
from the Company, as well as attorneys fees.