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‘Walgreens networks with AmerisourceBergen’
Posted on Tuesday, 13 February 2018 10:36
Shares in AmerisourceBergen jumped in after-hours trading yesterday after the Wall Street Journal (WSJ) reported Walgreens Boots Alliance is sounding out the possibility of taking over the USD 19.65 billion-market capitalised drug distributor.
According to the newspaper, representatives of chief executive Stefano Pessina reached out to counterpart Steven Collis about acquiring the remainder of the stake not already held in the medicine wholesaler.
People with knowledge of the situation told the WSJ the discussions are in the early-stages and a formal offer has not been made, nor can it be expected that a bid would be submitted.
Separately, the Financial Times reported the two have actually been in discussions for several weeks, with one source telling the newspaper that talks are “well-progressed but could still fall apart”.
Regardless, news of the approach is a sign of the times of the healthcare industry, as players consolidate in response to the shifts in the sector, such as rising drug costs and changes in the US Affordable Care Act.
Let us not forget analyst speculation that the recent wave of mergers and acquisitions is attributable to the expected entry of Amazon into the industry.
Last month the e-commerce juggernaut said it is joining forces with two other corporate behemoths to create an independent healthcare company to help cut costs and improve services for their employees in the US.
In a nutshell, the decision by Amazon, Berkshire Hathaway and JPMorgan circumvents the need to rely on private providers to handle their own health requirements for staff.
As the New York Times said: “The alliance was a sign of just how frustrated American businesses are with the state of the nation’s health care system and the rapidly spiralling cost of medical treatment.”
© Zephus Ltd