The largest retail pharmacy chain in the U.S.,
) and Alliance Boots continue to make steady progress to boost
their global presence in the prescription drug purchasing space.
The regulatory approval for the companies' equity investment deal
), a major pharmaceutical service company in North America, is
seen as yet more good news for investors after the positive
events last week.
Investors and competitors alike have been looking forward to the
regulatory clearance of the 10-year old deal between Walgreens
and AmerisourceBergen, effective Sep 1, 2013. The approval
boosted market sentiments as shares of Walgreens rose 1.58% on
the day of the announcement. On the other hand, other players in
the market such as
) are likely to scrutinize its branded and generic drug
purchasing network and contemplate strategic possibilities.
AmerisourceBergen will replace Walgreens' current pharmaceutical
) as the existing contract is set to expire in Aug 2013.
AmerisourceBergen already supplies specialty drugs to Walgreens.
Following the clearance, the company and Alliance Boots have the
right to purchase a minority stake of 7% in AmerisourceBergen in
the open market and another 16% equity stake in 2016 and 2017. As
per the approval, the equity stake is exercisable up to 25% in
aggregate, after accounting for the stock buyback activity of
Walgreens' long-term deal with AmerisourceBergen is expected to
create a kingpin in the prescription drug purchasing space.
Walgreens is optimistic about the financial and operational
benefits from the AmerisourceBergen deal for fiscal 2014 with
margin expansion and bottom-line accretion.
Walgreens continues to gain positive momentum on the back of
strategic deals. Currently, the stock carries a Zacks Rank #3
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