AmerisourceBergen Receives Regulatory Approval of Walgreens and Alliance Boots Equity Investment

VALLEY FORGE, Pa.–(BUSINESS WIRE)–

AmerisourceBergen Corporation (ABC) today announced that the parties have received regulatory approval of the previously disclosed agreement for Walgreen Co. and Alliance Boots GmbH to purchase an equity stake in the Company. On March 19, 2013, AmerisourceBergen announced that it had entered into a strategic, long-term relationship with Walgreens and Alliance Boots, which includes: a ten-year comprehensive primary pharmaceutical distribution contract with Walgreens; access to generic drugs and related pharmaceutical products through the Walgreens Boots Alliance Development joint venture; and opportunities to accelerate the Company’s efforts to grow its specialty and manufacturer services businesses domestically and internationally. In furtherance of this new partnership, Walgreens and Alliance Boots together were granted rights to purchase an equity position in AmerisourceBergen, which is outlined in detail below.

AmerisourceBergen continues to expect the new agreements to contribute an incremental $25 billion in revenues and approximately 20 cents in earnings per share in fiscal 2014, excluding the amortization of certain expenses related to the transaction and the warrants issued, certain non-recurring costs and a potential LIFO charge, and net of certain start up expenses. In addition, the Company reiterated its expectations for financial performance for fiscal year 2013, which includes expected revenue growth in the 11 percent to 13 percent range, and diluted earnings per share from continuing operations in the lower half of the range of $3.04 to $3.14, excluding certain expenses related to the relationship with Walgreens and Alliance Boots and the warrants issued, and the expected LIFO charge from onboarding of additional branded inventory. The other assumptions for fiscal 2013 stated in our earnings release on April 25, 2013 also remain unchanged.

Equity Position

As part of the value creation inherent in these agreements and to align interests and strengthen the long-term relationship, Walgreens and Alliance Boots together were granted the right to purchase a minority equity position in AmerisourceBergen, beginning with the right to purchase up to 7 percent of the fully diluted equity of AmerisourceBergen in the open market. In addition, AmerisourceBergen granted to Walgreens and Alliance Boots equity warrants exercisable for 16 percent in the aggregate of the fully diluted equity of AmerisourceBergen. The first tranche of warrants, representing 8 percent of the fully diluted equity of AmerisourceBergen, has a strike price of $51.50 and will be exercisable for a six-month period beginning in March 2016. The second tranche of warrants, also representing 8 percent of the fully diluted equity of AmerisourceBergen, has a strike price of $52.50 and will be exercisable for a six-month period beginning in March 2017. The warrants were allocated equally among Walgreens and Alliance Boots. Walgreens and Alliance Boots have agreed to customary transfer restrictions on their equity stake, and have also agreed not to acquire additional equity of AmerisourceBergen under the terms of a standstill agreement, subject to the terms and conditions of such agreement, including certain pre-emption rights and permitted exceptions.

Walgreens will have the ability to appoint one director to AmerisourceBergen’s board upon Walgreens and Alliance Boots together acquiring a 5 percent equity stake, and a second director upon exercise in full of the first warrants.

About AmerisourceBergen

AmerisourceBergen is one of the world’s largest pharmaceutical services companies serving the United States, Canada and selected global markets. Servicing both healthcare providers and pharmaceutical manufacturers in the pharmaceutical supply channel, the Company provides drug distribution and related services designed to reduce costs and improve patient outcomes. AmerisourceBergen’s service solutions range from niche premium logistics and pharmaceutical packaging to reimbursement and pharmaceutical consulting services. With over $80 billion in annualized revenue, AmerisourceBergen is headquartered in Valley Forge, PA, and employs approximately 13,000 people. AmerisourceBergen is ranked #32 on the Fortune 500 list. For more information, go to www.amerisourcebergen.com.

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