AmerisourceBergen (NYSE: ABC) today announced that it is entering into a strategic, long-term relationship with Walgreen Co. and Alliance Boots GmbH, which will streamline the distribution of pharmaceuticals to Walgreens’ stores and leverage global supply chain efficiencies while improving patient access to affordable pharmaceuticals to increase the efficiency of the healthcare system. AmerisourceBergen’s new expanded relationship with Walgreens and Alliance Boots 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 have been granted rights to purchase an equity position in AmerisourceBergen, which is described in greater detail below.
The new agreements are expected to be meaningfully accretive to AmerisourceBergen’s earnings and strengthen its confidence in delivering solid and sustainable long-term EPS growth. AmerisourceBergen has serviced Walgreens’ specialty business for several years, and in our fiscal 2014, the new relationship is expected to contribute an incremental $28 billion in revenues and approximately 20 cents in earnings per share, excluding the amortization of certain expenses related to the transaction, and certain non-recurring costs, and net of certain start up expenses.
“AmerisourceBergen is very excited to be joining in this unique global relationship with two of the undisputed leaders in healthcare,” said Steven H. Collis, President and Chief Executive Officer of AmerisourceBergen. “As we all recognize the imperatives of health reform not only here in the U.S. but also globally, we have entered into a unique opportunity to unlock value in the pharmaceutical supply chain by collaborating to leverage all of our proven strengths. This new relationship will significantly strengthen and grow our core business and increase our ability to deliver innovative solutions to our customers, and long-term benefits to all of our stakeholders. Importantly, these agreements not only expand our U.S. business, but also provide opportunities to meaningfully grow our specialty and manufacturer services businesses internationally."