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Walgreens, Alliance Boots to merge

BY Michael Johnsen

DEERFIELD, Ill. — Walgreens and Alliance Boots took the first step in creating what will be the first and largest global retail pharmacy player, the two companies announced Tuesday. "This creates an opportunity for us together to create an international expansion platform," Walgreens president and CEO Greg Wasson told reporters and analysts early Tuesday morning.

Beyond marrying two iconic health brands, the Walgreens-Boots alliance creates a retail pharmacy operation with much broader economies of scale and with an opportunity to cross-pollinate brands — including Boots’ No7 and Walgreens’ Delish — across new markets. "We’re going to bring the two [retail] brands together to create the first global pharmacy-led healthcare platform," Wasson said. "We’ll become a supply chain unmatched in the world."

"I had always believed that our industry needed a global player," commented Stefano Pessina, executive chairman of Alliance Boots. "I have tried to do this deal … for 10 years. And I’ve spoken to a lot of people and they were not very receptive," Pessina said. "And finally when we [began] our discussions with Greg, we understood each other and we saw the big picture, and [now] we are here. And you will see that this company will develop far beyond the [United States]."

Looking down the path of where a Walgreens/Boots combination will lead, both Wasson and Pessina identified further expansion into new emerging markets, including China, Turkey, North Africa and Egypt.

The two companies together will be:

  • The global leader in pharmacy-led, health and well-being retail, with more than 11,000 stores in 12 countries;
  • The largest global pharmaceutical wholesale and distribution network with more than 370 distribution centers delivering to more than 170,000 pharmacies, doctors, health centers and hospitals in 21 countries; and
  • The world’s largest purchaser of prescription drugs and many other health and well-being products.

Walgreens will invest approximately $6.7 billion in cash and stock — comprised of $4 billion in cash and 83.4 million shares — in exchange for a 45% equity ownership stake in Alliance Boots. Walgreens will have the option to proceed to a full combination by acquiring the remaining 55% of Alliance Boots in approximately three years’ time. At the current Walgreens share price and at a $1.55=£1 exchange rate, the second step of the transaction would be valued at approximately $9.5 billion in cash and stock, plus the assumption of Alliance Boots’ then-outstanding debt.

Completion of the initial investment, which is subject to various regulatory approvals, is expected to take place by Sept. 1.

Upon the completion of Walgreens’ initial investment in Alliance Boots, Wasson; Wade Miquelon, Walgreens EVP and CFO; Thomas Sabatino, Walgreens EVP and general counsel; and Robert Zimmerman, Walgreens SVP and chief strategy officer, will join the Alliance Boots board of directors. In addition, Pessina and Dominic Murphy, Boots’ director, will join the Walgreens board of directors.

The transaction is expected to be accretive to Walgreens’ net earnings per diluted share in the first year following completion of the initial step of the transaction, by approximately 23 cents to 27 cents, excluding one-time transaction costs. Walgreens expected combined synergies across both companies to be between $100 million and $150 million in the first year, and $1 billion by the end of 2016.

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J.DENIS says:
Jun-19-2012 05:16 pm

WOW---Congratulations Greg. THIS IS A BOLD AND EXCITING VENTURE John Denis

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Larry Thompson rejoins PepsiCo

BY Allison Cerra

PURCHASE, N.Y. — Larry Thompson has returned to PepsiCo to serve as the company’s EVP government affairs, general counsel and corporate secretary, effective July 30.

Thompson — who previously served as PepsiCo’s SVP government affairs, general counsel and corporate secretary from 2004 to 2011 — will be responsible for PepsiCo’s worldwide legal function and government affairs and public policy organizations. He also will oversee the company’s global compliance function and the company’s philanthropic arm, the PepsiCo Foundation.

Thompson succeeds Maura Abeln Smith, who chose to leave the company to pursue other opportunities.

"We are excited to welcome Larry back to PepsiCo," PepsiCo chairman and CEO Indra Nooyi said. "Larry is a proven and seasoned leader with a strong track record of success at PepsiCo. He has been a highly regarded and trusted advisor, and he has a deep knowledge of, and passion for our business. We will benefit greatly from Larry’s leadership moving forward."

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Appeals court rules in favor of Watson in Sanctura XR patent suit

BY Allison Cerra

PARSIPPANY, N.J. — The U.S. Court of Appeals for the Federal Circuit ruled in favor of Watson Pharmaceuticals during patent litigation concerning the drug maker’s abbreviated new drug application for an overactive bladder treatment.

The appeals court affirmed a U.S. District Court for the District of Delaware’s decision — made March 31 — that asserted that patents related to Allergan’s Sanctura XR (trospium chloride extended-release capsules) are invalid. Watson’s ANDA for a generic version of Sanctura XR is pending with the Food and Drug Administration.

Sanctura XR had total U.S. sales of approximately $66 million for the 12 months ended in April, according to IMS Health data.


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