AmerisourceBergen Corporation and Walgreens Boots Alliance, Inc. announced strategic agreements under which AmerisourceBergen will acquire the majority of Walgreens Boots Alliance’s Alliance Healthcare businesses for approximately $6.5 billion.
AmerisourceBergen’s acquisition of Alliance Healthcare will provide strong support for pharmacies and pharmacists across the globe and integrated solutions for pharmaceutical manufacturers. Walgreens Boots Alliance will be able to increase its focus on expanding its core retail pharmacy businesses, bringing even greater healthcare offerings to patients and customers and further accelerating its progress on its clear set of strategic priorities.
In addition to this transaction, the two companies have agreed to strengthen their strategic partnership by extending and expanding their commercial agreements. Their US 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. Furthermore, Alliance Healthcare UK will remain the distribution partner of Boots until 2031. Together, these agreements are expected to create incremental growth, synergies and efficiencies.
These announcements between the two global enterprises continue to build on the close partnership and strong foundation that began in 2013. Walgreens Boots Alliance is the largest shareholder of AmerisourceBergen with a stake of nearly 30 percent, and Ornella Barra, Co-Chief Operating Officer, Walgreens Boots Alliance, is a Board Member of AmerisourceBergen.
The Alliance Healthcare transaction and expanded strategic agreement are expected to:
· Extend AmerisourceBergen’s distribution presence with the addition of an established European leader and AmerisourceBergen’s global platform of higher-margin manufacturer services to support pharmaceutical innovation. As one of the largest pharmaceutical wholesalers in Europe, Alliance Healthcare will extend AmerisourceBergen’s core wholesale, distribution, and related solutions capabilities. The addition of Alliance Healthcare will enhance AmerisourceBergen’s existing global platform of manufacturer services and further its ability to support global access. Alliance Healthcare partners with healthcare companies and professionals to deliver a range of logistics and supply chain services and innovative solutions to help improve patient care. Global reach and specialty logistics capabilities are vital with rapidly accelerating pharmaceutical innovation, particularly for specialty medicines and with the advancement of cell and gene therapies.
· Allow Walgreens Boots Alliance to increase its focus on growing and transforming its core retail pharmacy and healthcare businesses, facilitate higher growth investments and accelerate its strategic goals.
· Extend and Expand of Strategic Partnership in the United States. In addition to the transaction announced, Walgreens Boots Alliance and AmerisourceBergen have extended their U.S. strategic partnership through 2029. The extended agreement will create incremental growth and efficiencies in sourcing, logistics and distribution. These initiatives support Walgreens pharmacy operations and enhance AmerisourceBergen’s ability to create differentiated value for all its customers. Walgreens Boots Alliance and AmerisourceBergen expect the financial benefits of the expansion of their U.S. strategic partnership to ramp over the next three years to achieve annual run-rate synergies in the fourth year of at least $150 million, which will be shared equally between the two companies.
· Enhance AmerisourceBergen’s scale and margin profile. Alliance Healthcare will strengthen AmerisourceBergen’s platform to deliver continued growth across pharmaceutical distribution and manufacturer services.
The transaction, which is expected to close by AmerisourceBergen’s fiscal year-end 2021, is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals. Walgreens Boots Alliance’s operations in China, Italy and Germany are not part of this transaction.
