Walgreens cuts stake in AmerisourceBergen to raise $1.85B: 5 notes

Walgreens Boots Alliance sold shares of AmerisourceBergen to generate $1.85 billion in initial proceeds and pay down debt.

Five details:

1. Under terms of the Aug. 3 deal, Walgreens Boots Alliance sold shares of AmerisourceBergen common stock to prepaid variable share forward transactions through a registered public offering. The proceeds from this transaction hit $1.6 billion.

2. AmerisourceBergen also repurchased shares from Walgreens Boots Alliance totaling around $250 million. Walgreens ownership of AmerisourceBergen common stock decreased by around 16 percent after the concurrent share repurchase.

3. Walgreens Boots Alliance may receive additional proceeds of up to $517 million depending on stock price at the time the prepaid variable share forward transactions settle, which is scheduled for the first and third quarters of the 2026 fiscal year.

4. Proceeds from the transaction will primarily be used to pay down debt and then general corporate purposes, according to Walgreens Boots Alliance. The company has 13,000 locations in the U.S., Europe and Latin America, employing more than 325,000 people.

5. In June, Walgreens Boots Alliance reported profits dropped 59 percent in the third quarter of 2023, and the company revised its full-year earnings outlook. Rosalind Brewer, CEO of Walgreens Boots Alliance, said the new guidance reflects consumer spending uncertainty. The company also increased its cost savings program target to $4.1 million.

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