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Walgreen buys stake in Swiss health firm
Source: Agencies |
June 20, 2012, Wednesday
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WALGREEN Co will pay US$6.7 billion in cash and stock to buy a stake in European health and beauty retailer Alliance Boots in the first global venture for the largest US drugstore chain.
The company said yesterday it plans to initially spend about US$4 billion in cash and contribute more than 83 million shares for a 45 percent ownership stake in Switzerland-based Alliance Boots, which runs more than 3,300 health and beauty retail stores in 11 countries.
Walgreen has an option to buy the rest of the firm in three years in a deal valued at US$9.5 billion based on Walgreen's share price and the current exchange rate.
Walgreen expects the purchase of its initial stake in Alliance Boots to be completed by September. Alliance Boots also runs a pharmaceutical wholesale business that supplies pharmacies, doctors and other health care providers in 21 countries.
The acquisition comes while Walgreen works through a sales slump prompted largely by a split with pharmacy benefits manager Express Scripts Holding Co. Walgreen has seen sales fall for several months since it stopped filling prescriptions for Express Scripts, the largest US pharmacy benefits manager, at the end of last year.
Yesterday, Walgreen also said its fiscal third-quarter earnings fell 11 percent partly due to the Express Scripts break. Walgreen earned US$537 million, or 62 cents per share, in the three months that ended May 31. That compares to earnings of US$603 million, or 65 cents per share, in last year's quarter.
Revenue slid 3 percent to US$17.8 billion.
The company said yesterday it plans to initially spend about US$4 billion in cash and contribute more than 83 million shares for a 45 percent ownership stake in Switzerland-based Alliance Boots, which runs more than 3,300 health and beauty retail stores in 11 countries.
Walgreen has an option to buy the rest of the firm in three years in a deal valued at US$9.5 billion based on Walgreen's share price and the current exchange rate.
Walgreen expects the purchase of its initial stake in Alliance Boots to be completed by September. Alliance Boots also runs a pharmaceutical wholesale business that supplies pharmacies, doctors and other health care providers in 21 countries.
The acquisition comes while Walgreen works through a sales slump prompted largely by a split with pharmacy benefits manager Express Scripts Holding Co. Walgreen has seen sales fall for several months since it stopped filling prescriptions for Express Scripts, the largest US pharmacy benefits manager, at the end of last year.
Yesterday, Walgreen also said its fiscal third-quarter earnings fell 11 percent partly due to the Express Scripts break. Walgreen earned US$537 million, or 62 cents per share, in the three months that ended May 31. That compares to earnings of US$603 million, or 65 cents per share, in last year's quarter.
Revenue slid 3 percent to US$17.8 billion.
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