By Dow Jones Business News,
January 23, 2014, 05:01:00 PM EDT
McKesson Gets Necessary Support for Celesio Deal -- Update
By Lauren Pollock
McKesson Corp. said it received the necessary support to acquire German rival Celesio AG, about a week after saying it
hadn't received the requisite 75% backing from investors.
The U.S. drug distributor will acquire majority shareholder Franz Haniel & Cie. GmbH's entire stake in Celesio for
23.50 euros a share, matching its previous boosted bid.
In a separate deal, McKesson agreed to acquire convertible bonds from Elliott Capital Advisors. After the close of the
two agreements, McKesson will hold more than 75% of Celesio.
McKesson had said last week that it was unsuccessful in gaining the necessary shareholder support for its bid, which
had a 75% completion condition for Celesio's outstanding shares and convertible bonds.
"We are excited to move forward with our acquisition of Celesio," Chief Executive John H. Hammergren said. "We look
forward to bringing together the strengths of the McKesson and Celesio organizations so we can provide our customers
with more efficient delivery of health-care products and services around the world."
Earlier in January, McKesson had improved its bid for Celesio to EUR23.50 a share from EUR23, valuing the German
distributor at more than EUR6.23 billion.
McKesson had made its initial offer for Celesio in October. The proposed acquisition is expected to boost McKesson's
leverage in negotiations with generic drug manufacturers and broaden its footprint geographically.
The increased bid was thought to remove a major obstacle to the deal--opposition hedge fund Elliott--but didn't
guarantee it would go through since McKesson had made the offer contingent on it acquiring 75% of the company, the
threshold for control under German law.
McKesson's main business involves U.S. prescription-drug distribution and medical-products distribution. Celesio is a
large European drug wholesaler that also operates retail pharmacies.
McKesson expects to fund a portion of the deal with cash and has a bridge financing facility in place to fund the
McKesson expects the deal to add $1 to $1.20 to adjusted earnings in the first 12 months following the closing. It
expects to see annual synergies between $275 million and $325 million.
Write to Lauren Pollock at email@example.com
Corrections & Amplifications
This item was corrected at 5:28 p.m. ET to reflect the correct spelling of Celesio, which was misspelled as Celsio in
several instances in the original version.
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