AmerisourceBergen to buy Walgreens’ distribution business for $6.5bn

AmerisourceBergen has agreed to buy Walgreens Boots Alliance’s distribution business, Alliance Healthcare, for around $6.5bn.

Under the terms of the transaction, which has been approved by both companies’ boards of directors, AmerisourceBergen will pay WBA $6.275bn in cash and deliver 2m shares of common stock at closing of the deal.

AmerisourceBergen said the deal will provide even stronger support for pharmacies and pharmacists across the globe and integrated solutions for pharmaceutical manufacturers.

In addition, 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.

Meanwhile, Alliance Healthcare UK will remain the distribution partner of Boots until 2031.

Steven Collis, chairman, president & chief executive officer of AmerisourceBergen, said: "Today’s announcements will expand our reach and solutions in pharmaceutical distribution and add to AmerisourceBergen’s breadth and depth of global manufacturer services, supporting our ability to create differentiated value for all our stakeholders."

Upon closing, the deal is expected to deliver high-teens percentage accretion to AmerisourceBergen's adjusted diluted earnings per share in the first fiscal year. AmerisourceBergen expects synergies from the acquisition to ramp up to an annual run-rate of $75m in the fourth year.