Just so we are not offering back-ward looking analysis, here are two controversial deals that investors should pay attention to heading into 2014.
In mid-2012, Walgreens (WAG) said it would take a 45% stake in European pharmacy giant Alliance Boots for $6.7 billion. The deal was immediately panned by analysts sending shares in Walgreens tumbling. Some analysts said that Walgreens investment in Alliance Boots, owned by private equity giant KKR (KKR), indicated the company wouldn't re-sign a key pharmacy benefits management contract with Express Scripts.
As it turns out, the analysts were wrong. Not only did Walgreens get its deal with Express Scripts, but the company's shares have performed exceptionally well since the June 2012 acquisition, nearly doubling in about 18-months' time.But the best may be yet to come for Walgreens.
The company has the option to buy a remaining 55% stake in Alliance Boots from KKR for $9.5 billion, making it one of the world's biggest drug store and pharmacy chains. That could also expose Walgreens to recovering European economies and diversify the company's revenue streams from the U.S. healthcare market, which is on the cusp of a generational transformation. Walgreens shares have gained over 55% in 2013.
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