AmerisourceBergen agrees €5.3bn deal for Alliance Healthcare

Boots distributor split from US drugstore chain

US drug wholesaler AmerisourceBergen has agreed to buy Alliance Healthcare, a distributor owned by Walgreens Boots Alliance, for about $6.5 billion (€5.3 billion), pushing further into Europe.

The offer, comprised $6.275 billion in cash and two million AmerisourceBergen shares, comes three years after a potential deal for Walgreens to acquire the pharmaceutical distributor fell through.

The two companies already have a strategic partnership in place but, as part of the transaction, Walgreens and AmerisourceBergen have agreed to extend a US distribution agreement by three years to 2029. Alliance Healthcare will also remain a distribution partner for Boots, the UK drugstore group, for a decade.

Walgreens is the largest shareholder in AmerisourceBergen with an almost 30 per cent stake.


The deal is designed to expand AmerisourceBergen’s presence in Europe, as Alliance is one of the largest wholesalers on the continent.

It will also allow Walgreens to focus on its pharmacy business - which includes more than 9,000 drugstores across the US.

In late 2019 Walgreens explored a $70 billion management buyout with US private equity giant KKR that would have delisted the retailer. The sale of Alliance Healthcare is likely to reignite speculation about a fresh attempt to take the drugstore group private.

Stefano Pessina, the deal hungry chief who assembled Walgreens through a series of mergers over the years, could take advantage of Walgreens' smaller business and market valuation to explore a buyout.

Mr Pessina announced last year that he planned to step down from the role and become executive chairman but did not give a timeline.

Alliance, which began life in Italy as Alleanza Farmaceutica in 1977, was the company that put Mr Pessina into the big league. A series of deals culminated in a $600 million merger with the UK-listed UniChem in 1997.

Less than a decade later, Alliance UniChem combined with Boots, the stalwart British retail pharmacy chain, in a deal that created a pan-European pharmacy giant with £13 billion of annual sales.

Mr Pessina teamed up with private equity group KKR in 2007 to take Alliance Boots private, a transaction lauded for its audacity but criticised for its impact on Boots, a paternalistic company with Methodist origins that was forced to cut costs hard to service the £9 billion of debt taken on to fund the merger.

In 2014, Walgreens paid $23 billion for its British rival in a two-part deal that created a transatlantic behemoth.

Walgreens and AmerisourceBergen expect synergies in four years’ time to be at an annual run rate of at least $150 million, which will be split equally between the companies.

News of the deal comes as Amazon, JPMorgan Chase and Berkshire Hathaway called time on their joint venture to create an online pharmacy and change the US healthcare system. – Copyright The Financial Times Limited 2021