This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

McKesson (MCK) Becomes $150 Billion Powerhouse With Celesio Acquisition

NEW YORK (TheStreet) -- Pharmaceutical company McKesson Corporation (MCK - Get Report) announced it will acquisition of German drug wholesaler and distributor Celesio AG before reporting second-quarter earnings. The transaction, consisting of a 50.01% stake, currently held by diversified holding company Franz Haniel & Cie, and public tender of remaining traded shares, will total $8.3 billion.

Combined, the group expects to generate annual revenues of $150 billion across operations spanning 20 countries. The San Francisco-based company said the business will become an international pharmaceutical distribution powerhouse, benefiting from supply chain efficiency and global sourcing.

"The combination of McKesson and Celesio will create a leading global healthcare services platform that will advance our customers' ability to deliver better, more efficient healthcare solutions," said CEO John H. Hammergren in a statement. "We will bring together the strengths and expertise of each company to address global healthcare challenges."

"This transaction is about growth," added Celesio CFO Marion Helmes. "This combination allows two market leaders with complementary geographic footprints to work together in an increasingly global market segment."

Must Read: Apollo (APOL) Income Drops 61%, Yet Shares Surge

McKesson said both companies will maintain individual branding and utilize existing networks and distribution channels.

The acquisition news, combined with second-quarter earnings that beat expectations, sent shares 7% higher to $153.03 in pre-market trading.

For the second quarter ended Sep. 30, the company reported earnings of $2.27 a share on an 11% year-on-year revenue increase to $33 billion. Analysts surveyed by Yahoo! Finance estimated earnings of $2.04 a share on $32.08 billion.

McKesson expects adjusted earnings of between $8.40 and $8.70 a share for the full-year ending March 31. This estimation excludes acquisition expenses, inventory-related charges and litigation reserve adjustments.

TheStreet Ratings team rates McKesson Corp as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about its recommendation:

"We rate McKesson Corp (MCK) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, growth in earnings per share and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
MCK $189.35 0.00%
AAPL $118.30 0.00%
FB $104.24 0.00%
GOOG $742.60 0.00%
TSLA $230.26 0.00%


Chart of I:DJI
DOW 17,719.92 -78.57 -0.44%
S&P 500 2,080.41 -9.70 -0.46%
NASDAQ 5,108.6660 -18.8590 -0.37%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs