Item 1.01. Entry into a Material Definitive Agreement.
Overview
On January 6, 2021, AmerisourceBergen Corporation (the "Company") announced that
it has entered into a strategic transaction with Walgreens Boots Alliance, Inc.
("WBA"), the principal components of which are the acquisition by the Company of
the majority of WBA's Alliance Healthcare businesses; a three-year extension
through 2029 of the existing distribution agreement between WBA and the Company;
a three-year extension through 2029 of the arrangement pursuant to which the
Company has access to generic drugs and related pharmaceutical products through
Walgreens Boots Alliance Development GmbH; a distribution agreement pursuant to
which the Company will supply branded and generic pharmaceutical products to
WBA's Boots UK Ltd. following the closing of the acquisition by the Company of
the majority of WBA's Alliance Healthcare businesses; and an agreement to
explore a series of strategic initiatives designed to create incremental growth
and efficiencies in sourcing, logistics and distribution.
Share Purchase Agreement
On January 6, 2021, the Company entered into a Share Purchase Agreement (the
"Share Purchase Agreement") with WBA pursuant to which the Company will acquire
the majority of WBA's Alliance Healthcare wholesale distribution businesses,
together with certain pre-wholesale and other services, as well as certain of
WBA's retail pharmacy operations from WBA for approximately $6.5 billion,
comprised of $6.275 billion in cash, subject to certain purchase price
adjustments, and 2 million shares of Company common stock. WBA's operations in
China, Italy and Germany are not part of this transaction. The Company expects
to fund the cash purchase price through a combination of cash on hand and new
debt financing, and has obtained $3.025 billion in bridge financing commitments
in connection with this transaction (the "Transaction"). The Transaction is
subject to the satisfaction of customary closing conditions, including receipt
of applicable regulatory approvals.
The foregoing description of the Share Purchase Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Share Purchase Agreement, which is filed as Exhibit 2.1 hereto and incorporated
herein by reference. The representations, warranties and covenants in the Share
Purchase Agreement were made solely for the benefit of the parties to the Share
Purchase Agreement for the purpose of allocating contractual risk between those
parties, and do not establish these matters as facts. Investors should not rely
on the representations, warranties and covenants as characterizations of the
actual state of facts or condition of the Company, WBA or any of their
respective subsidiaries or affiliates.
A&R Shareholders Agreement
In connection with the closing of the Transaction, the Company and WBA will
enter into an Amended and Restated Shareholders Agreement (the "A&R Shareholders
Agreement"), which amends and restates in its entirety the existing Shareholders
Agreement of the Company, dated March 18, 2013 (the "Existing Shareholders
Agreement"). The A&R Shareholders Agreement, among other things, increases by 1%
the percentage of outstanding ABC Common Stock which WBA and its affiliates are
permitted to hold.
The foregoing description of the changes between the Existing Shareholders
Agreement and the A&R Shareholders Agreement does not purport to be complete and
is qualified in its entirety by reference to the full text of the form of A&R
Shareholders Agreement, which is filed as Exhibit 10.1 hereto and is
incorporated herein by reference.
Item 7.01. Regulation FD Disclosure
On January 6, 2021, the Company and WBA issued a joint press release announcing
the execution of the Share Purchase Agreement, a copy of which is furnished as
Exhibit 99.1 hereto. Additionally, on January 6, 2021, the Company presented an
investor presentation in connection with the announcement of the Transaction, a
copy of which is furnished as Exhibit 99.2 hereto.
The information in this Item 7.01 of this Current Report, including Exhibits
99.1 and 99.2 hereto, is being furnished to the Securities and Exchange
Commission and shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise
subject to the liabilities of that section. This information shall not be deemed
to be incorporated by reference in any filing under the Securities Act of 1933,
as amended, or the Exchange Act, except as shall be expressly set forth by
specific reference in such a filing.
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Forward Looking Statements
This communication contains "forward-looking statements". These statements are
made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Our statements regarding anticipated synergies, earnings per
share and adjusted earnings per share accretion and free cash flows and adjusted
free cash flows are forward-looking statements and subject to significant
uncertainty. In addition, other forward-looking statements may include, without
limitation, statements about the proposed acquisition and related strategic
transactions, the expected timetable for completing the proposed acquisition and
related strategic transactions, the expected benefits and synergies of the
proposed acquisition and related strategic transactions, future opportunities
for AmerisourceBergen and WBA and any other statements regarding
AmerisourceBergen's, Alliance Healthcare's or WBA's future operations, financial
or operating results, capital allocation, dividend policy, debt ratio,
anticipated business levels, future earnings, planned activities, anticipated
growth, market opportunities, strategies, competitions, and other expectations
and targets for future periods. Forward-looking statements may often be
identified by the use of words such as "will", "may", "could", "should",
"would", "project", "believe", "anticipate", "expect", "plan", "estimate",
"forecast", "potential", "intend", "continue", "target" and variations of these
words or comparable words. Because forward-looking statements inherently
involve risks and uncertainties, actual future results may differ materially
from those expressed or implied by such forward-looking statements. Factors
that could cause or contribute to such differences include, but are not limited
to: the parties' ability to meet expectations regarding the timing of the
proposed acquisition and related strategic transactions; the parties' ability to
consummate the proposed acquisition and related strategic transactions; the
conditions to the completion of the proposed acquisition and related strategic
transactions; the regulatory approvals required for the proposed acquisition and
related strategic transactions not being obtained on the terms expected or on
the anticipated schedule or at all; inherent uncertainties involved in the
estimates and judgments used in the preparation of financial statements and the
providing of estimates of financial measures, in accordance with GAAP and
related standards, or on an adjusted basis; the integration of Alliance
Healthcare into AmerisourceBergen being more difficult, time consuming or costly
than expected; AmerisourceBergen's or Alliance Healthcare's failure to achieve
expected or targeted future financial and operating performance and results; the
possibility that the combined company may be unable to achieve expected
benefits, synergies and operating efficiencies in connection with the proposed
acquisition and related strategic transactions within the expected time frames
or at all; customer loss and business disruption being greater than expected
following the proposed acquisition and related strategic transactions; the
retention of key employees being more difficult following the proposed
acquisition and related strategic transactions; the effect of any changes in
customer and supplier relationships and customer purchasing patterns; the
impacts of competition; changes in the economic and financial conditions of the
business of AmerisourceBergen or Alliance Healthcare; and uncertainties and
matters beyond the control of management and other factors described under "Risk
Factors" in each of AmerisourceBergen's and WBA's Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and other filings with the SEC. You can access
AmerisourceBergen's or WBA's filings with the SEC through the SEC website at
www.sec.gov or through AmerisourceBergen's or WBA's website, and
AmerisourceBergen and WBA strongly encourage you to do so. Except as required by
applicable law, AmerisourceBergen, Alliance Healthcare and WBA undertake no
obligation to update any statements herein for revisions or changes after the
date of this communication.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are filed as part of this report:
2.1 Share Purchase Agreement, by and between Walgreens Boots Alliance, Inc.
and AmerisourceBergen Corporation, dated as of January 6, 2021.
10.1 Form of Amended and Restated AmerisourceBergen Shareholders Agreement,
between AmerisourceBergen Corporation and Walgreens Boots Alliance,
Inc.
99.1 Joint News Release, dated January 6, 2021, of AmerisourceBergen
Corporation and Walgreens Boots Alliance, Inc.
99.2 Investor Presentation, dated January 6, 2021.
104 Cover Page Interactive Data File (formatted as inline XBRL)
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