Walgreens Boots Alliance plans to sell its pharmacy wholesale business to AmerisourceBergen for $6.5 billion, the companies announced on Wednesday.
The transaction will include $6.27 billion in cash and 2 million shares of AmerisourceBergen’s stock.
Walgreens will sell most of its Alliance Healthcare business, one of the largest pharmaceutical wholesalers in Europe. AmerisourceBergen CEO Steven Collis said the deal would expand the company’s reach and add to the breadth and depth of its global manufacturing services. In fiscal year 2020, Walgreens’ wholesale business brought in roughly $19 billion in revenue.
In turn, Walgreens plans to pour funds from the deal into retail pharmacy business, as well as its healthcare efforts. Like other retailers, Walgreens is also trying to move more into primary care. It struck a partnership over the summer with primary care startup VillageMD, with plans to invest $1 billion in the company and open 500 to 700 clinics attached to its stores in the next five years.
Walgreens CEO Stefano Pessina said the deal was a “logical step,” given that Walgreens and AmerisourceBergen have been partners since 2013. The Pennsylvania-based wholesaler supplies a significant amount of generic and branded drugs to Walgreens’ pharmacies. Walgreens is also AmerisourceBergen’s largest shareholder, with a 30% stake.
“This strategic agreement with AmerisourceBergen, which we consider to be the world’s leading pharmaceutical wholesaler, is a very positive development for the two companies,” he said in a news release.
Walgreens said it plans to extend its strategic partnership with AmerisourceBergen through 2029.
Photo credit: Joe Raedle, Getty Images