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.
AMERISOURCEBRGN (ABC): Free Stock Analysis
CARDINAL HEALTH (CAH): Free Stock Analysis
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WALGREEN CO (WAG): Free Stock Analysis Report
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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