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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

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

NEW YORK (TheStreet) -- Pharmaceutical company McKesson Corporation (MCK) 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."

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."

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,563.30 -317.06 -1.88%
S&P 500 1,930.67 -39.40 -2.00%
NASDAQ 4,369.7730 -93.1290 -2.09%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs