Walgreens Boots to Sell Pharmacy Wholesale Operation to AmerisourceBergen
January 06 2021 - 8:53AM
Dow Jones News
By Micah Maidenberg
Walgreens Boots Alliance Inc. said it agreed to sell the
majority of its pharmacy wholesale unit to AmerisourceBergen Corp.,
a move it said would help the drugstore chain to better focus on
its retail pharmacy business and health offerings.
AmerisourceBergen, a distributor of pharmaceutical products,
will pay $6.5 billion for the wholesale business, Alliance
Healthcare, including about $6.3 billion in cash and two million of
its shares, the companies said Wednesday. The planned deal would
expand Walgreens's nearly 30% stake in AmerisourceBergen, which
makes it the largest shareholder of the latter company, according
to both firms.
In its latest quarter, Walgreens generated $6 billion in sales
from its wholesale unit, which consists of Alliance Healthcare and
the stake in AmerisourceBergen. The Alliance unit distributed
health-care products and services to more than 115,000 pharmacies,
hospitals and other health providers annually, as of the end of
last August, Walgreens said in a filing. It operated then in 11
countries, most of them in Europe, the filing says.
Walgreens grappled with challenges related to the coronavirus
last year, in part because the pandemic dampened customer traffic
and prescription demand in the U.K., where the company operates the
Boots U.K. chain. The British government ordered a new lockdown
this week.
However, sales for its latest quarter for its retail-pharmacy
unit in the U.S. were up roughly 4% to $27 billion. The deal to
sell off its wholesale business will allow it to home in on its
retail pharmacies, Walgreens said. It also said the transaction
would help it focus on its health-care businesses. The retailer
said last year it was working with primary-care provider VillageMD
to open 500 to 700 clinics at Walgreens sites across the country
over the next five years.
AmerisourceBergen said the deal would bolster its business
providing goods to pharmacies and pharmacists.
Walgreens is scheduled to release results for its first quarter
for its 2021 fiscal year Thursday.
Walgreens and AmerisourceBergen also said Wednesday they
extended a distribution agreement for the U.S. by three years until
2029. The Alliance Healthcare U.K. branch will continue to
distribute products to Walgreens's Boots business until 2031, the
companies said.
(END) Dow Jones Newswires
January 06, 2021 08:38 ET (13:38 GMT)
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