Walgreens Boots Alliance will sell its pharmaceutical wholesale business to AmerisourceBergen in a $ 6.5 billion cash and stock transaction.
Pharmaceutical wholesalers essentially act as intermediaries, buying drugs from manufacturers and then distributing them to customers such as pharmacy chains, hospitals and doctors’ offices.
Walgreens said Wednesday that the deal would allow it to focus more on expanding its core retail pharmacy, such as the COVID-19 pandemic, like others.
Drugstore chains and other retailers were particularly hard hit last spring when the pandemic forced shoppers to stay home and stay away from their stores.
Walgreens estimated in October that the pandemic shaved off about $ 520 million of its operating income in the last quarter of fiscal 2020. But the pharmacy chain also increased sales and prescriptions in the United States and some improvement through its Boots- stores in the UK.
Walerens Boots Alliance Inc. in Deerfield, Illinois, operates more than 21,000 stores, primarily in the United States and the United Kingdom. Drugstores are the main focus of its business, unlike its competitor CVS Health Corp., which also runs large insurance and pharmacy benefits businesses.
AmerisourceBergen will pay nearly $ 6.3 billion in cash and 2 million shares of its common stock for Walgreens’ Alliance Healthcare business in a deal the companies expect to close by September. Walgreens already owns a nearly 30% stake in AmerisourceBergen.
Alliance Healthcare provides more than 115,000 pharmacies, doctors and health centers in Europe and Egypt.
The companies also said on Wednesday that they would extend their U.S. distribution agreement by three years until 2029.
Walgreens said in November that it would combine its wholesale business in Germany with McKesson Corp., and it would control 70% of the business. A Walgreens spokesman said Wednesday that the McKesson joint venture is not part of the Amerisource agreement.
Shares of AmerisourceBergen Corp., based in Chesterbrook, Pennsylvania, rose more than 8% to $ 105.78 on Wednesday afternoon. Walgreens shares rose more than 4% to $ 43.10. Both have dropped the increase by more than 1% above the Dow Jones industrial average, of which Walgreens is a component.
Walgreens will report results from its fiscal first quarter on Thursday.