Sergio Dionisio/Associated PressA Boots pharmacy in central London.8:51 a.m. | Updated
The American drug store chain Walgreens has agreed to buy a 45 percent stake in Alliance Boots, the European pharmacy retailer, for $6.7 billion, in a deal that could allow it to take full control of Alliance Boots by 2015.
The deal will create one of the world’s largest drug store and pharmacy retailers with more than 11,000 stores in 12 countries. The acquisition also would allow Walgreens to expand into overseas markets, and give Alliance Boots a presence in the Unites States that it has long wanted.
“Today’s announcement represents an exciting opportunity to accelerate our five core strategies and advance that mission in the U.S. and now internationally,” Gregory Wasson, chief executive of Walgreens, said in a statement.
The deal represents the latest strategic maneuver by Alliance Boots’ executive chairman, Stefano Pessina, who joined forces with the investment firm Kohlberg Kravis Roberts in 2007 to acquire the European pharmacy retailer for around $22 billion.
Mr. Pessina, an Italian billionaire, has expanded the company through a number of international acquisitions to turn Alliance Boots into a global retailer. In 2006, he played a central role in the $12 billion merger between Boots and a rival, Alliance Unichem.
In recent months, Mr. Pessina had been looking for a new acquisition or merger, either in Asia or in North America, to continue Alliance Boot’s international expansion, according to a person with direct knowledge of the matter.
“This strategic transaction represents a further vital step in achieving our vision of becoming a global healthcare leader,” Mr. Pessina said in a statement.
Walgreens said it had offered to buy the European pharmacy and beauty retailer for $4 billion in cash and another $2.7 billion in company stock. The drug store chain also has the option to buy the remaining 55 percent stake in Alliance Boots three years after the deal closes for $9.5 billion in cash and stock. The final price may vary depending on the performance of Walgreens’ shares and foreign exchange fluctuations.
The deal is the latest in a flurry of acquisitions of European targets by American companies. So far this year, the combined value of European mergers and acquisitions, not including Walgreens’ transaction for Alliance Boots, has reached $99.5 billion, according to the data provider Dealogic. U.S. companies represent around 43 percent of the acquirers.
The $99.5 billion figure so far this year is a 21 percent decline over the same period in 2011, but is higher than the combined $72.7 billion of deals this year in the United States.
Under the terms of the deal, Mr. Pessina of Alliance Boots and K.K.R.’s Dominic Murphy will join Walgreens’ board, while Mr. Wasson of Walgreens and a number of the company’s executives will become Alliance Boots board members, according to a company statement.
Walgreens said it expected annual costs savings of up to $150 million in the first year after the deal closes, and as much as $1 billion of savings by the end of 2016. The deal is expected to close by September 1.
Goldman Sachs, Lazard and the law firms Wachtell, Lipton, Rosen & Katz and Allen & Overy advised Walgreens, while Centerview Partners and the law firms Darrois Villey Maillot Brochier and Simpson Thacher & Bartlett advised Alliance Boots.
This post has been revised to reflect the following correction:
Correction: June 19, 2012
An earlier version of the story incorrectly said the deal is expected to close by the end of September. It is expected to close by September 1.
No comments:
Post a Comment