Walgreen to Acquire 45% Stake in Alliance Boots for $6.7 Billion

Arthi Gupta
19 Jun, 2012
New York City

Walgreen Co. and Alliance Boots GmbH entered into a strategic transaction that will create a global pharmaceutical leader with 11,000 stores in 12 countries and presence in 25 nations and 370 distribution centers and serve 170,000 pharmacies.

[R]9:30 AM New York – Walgreen Co. and Alliance Boots GmbH entered into a strategic transaction that will create a global pharmaceutical leader with 11,000 stores in 12 countries and presence in 25 nations and 370 distribution centers and serve 170,000 pharmacies.[/R]

Walgreen Co. and Alliance Boots GmbH entered into a strategic transaction that will create a global pharmaceutical leader with 11,000 stores in 12 countries and presence in 25 nations and 370 distribution centers and serve 170,000 pharmacies.

Walgreen will acquire 45% stake in Alliance Boots for a total of $6.7 billion in cash and stock comprised of $4 billion in cash and 83.4 million shares. Walgreen could also acquire the full control of the company by 2015 for $9.5 billion in cash and stocks.

Walgreen at the end of 2011 had 8,210 store locations and the deal will expand its presence in Europe and emerging markets.

The transaction is expected to be accretive to Walgreens net earnings per diluted share in the first year following completion of the initial step of the transaction, by approximately 23 cents to 27 cents, excluding one-time transaction costs.

Stefano Pessina, executive chairman of the company with the investment firm KKR acquired Boots in 2007 for 12 billion pounds and since then the drug retailer has acquired several other companies to expand its reach in emerging markets.

Goldman Sachs and Bank of America offered short term financing of $3.5 billion to Walgreen before the company lined up permanent capital.