Walgreens Boots Alliance Inc
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Consumer Staples : Food & Staples Retailing | Mid Cap Value
Company profile

Walgreens Boots Alliance, Inc., is a holding company. The Company is a pharmacy-led health and wellbeing company. The Company operates through three segments: Retail Pharmacy USA, Retail Pharmacy International and Pharmaceutical Wholesale. The Retail Pharmacy USA segment consists of the Walgreen Co. (Walgreens) business, which includes the operation of retail drugstores, care clinics and providing specialty pharmacy services. The Retail Pharmacy International segment consists primarily of the Alliance Boots pharmacy-led health and beauty stores, optical practices and related contract manufacturing operations. The Pharmaceutical Wholesale segment consists of the Alliance Boots pharmaceutical wholesaling and distribution businesses. The Company's portfolio of retail and business brands includes Walgreens, Duane Reade, Boots and Alliance Healthcare, as well as global health and beauty product brands, including No7, Botanics, Liz Earle and Soap & Glory.

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Walgreens sells majority of Alliance Healthcare pharmacy business to AmerisourceBergen in $6.5 billion deal

8:03 am ET January 6, 2021 (MarketWatch)

Tonya Garcia

Walgreens Boots Alliance Inc. (WBA) announced Wednesday that it has sold a majority of its Alliance Healthcare business to pharmaceutical product and services provider AmerisourceBergen Corp. (ABC) in a $6.5 billion deal.

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

Revenue in fiscal 2020 for the businesses sold totaled $19 billion.

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In a statement, the companies say the deal will provide support for pharmacies and pharmacists through AmerisourceBergen, and Walgreens will now be free to increase its focus on its core retail pharmacy business.

The deal also expands AmerisourceBergen's business in Europe.

The two companies have partnered since 2013, and Walgreens is AmerisourceBergen's largest stockholder with a 30% stake.

The news sent shares of Walgreens up 2% in premarket trading, while AmerisourceBergen shares jumped 6.4%.

In addition to the pharmacy transaction, the two companies have also extended their U.S. distribution agreement three years until 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 Walgreens distribution partner until 2031.

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The deal is expected to be add to AmerisourceBergen's adjusted earnings per share in the first fiscal year.

Walgreens expects expects the transaction to be "slightly dilutive" in the current financial year and accretive in the long term.

AmerisourceBergen also updated its fiscal 2021 guidance, forecasting adjusted EPS in the range of $8.25 to $8.50, up from previous guidance of $8.20 to $8.45.

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

The FactSet consensus is for EPS of $8.42.

Walgreens stock has slumped nearly 31% over the past year. AmerisourceBergen has gained 14.7% just shy of the benchmark S&P 500 index's gain of 14.8% for the period.

-Tonya Garcia; 415-439-6400; AskNewswires@dowjones.com


(END) Dow Jones Newswires

January 06, 2021 08:03 ET (13:03 GMT)

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