(Reuters) – U.S. drug wholesaler AmerisourceBergen Corp said on Wednesday it would buy Walgreens Boots Alliance’s drug distribution business for $6.5 billion to expand in Europe.
The deal will help Walgreens focus more on core pharmacy unit as well as its retail business, where sales have tanked due to the COVID-19 pandemic, resulting in a nearly 30% slump in shares in 2020.
AmerisourceBergen will pay the debt-laden pharmacy chain $6.27 billion in cash and deliver 2 million of its common stock at closing of the transaction. With a 30% stake, Walgreens is the largest shareholder of AmerisourceBergen.
Walgreens’ unit, Alliance Healthcare, is one of the largest drug distributors in Europe. The deal will not include operations in China, Italy and Germany and Alliance Healthcare UK will remain a partner of Walgreens’ country unit until 2031.
Reuters reported in May last year that AmerisourceBergen had approached Walgreens to explore a deal for the company’s drug distribution business.
Walgreens had in 2019 explored going private and held preliminary discussions with private equity firms, people familiar with the matter said at the time.
The company has an agreement to source branded and generic drugs from AmerisourceBergen in the United States. The companies said their U.S. distribution agreement will be extended by three years until 2029.
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