Per a report in The Wall Street Journal, Walgreens Boots Alliance, Inc. (WBA - Free Report) is in early-stage talks to buy the remaining stake in the leading pharmaceutical services company, AmerisourceBergen Corporation (ABC - Free Report) . Soon after the takeover rumor surfaced on Feb 12, shares of AmerisourceBergen gained 15.7% in after-hours trading and subsequently, closed with a 0.3% rise. However, the stock price of Walgreens remained unchanged.
In this regard, we remind investors that the drugstore retailer and pharmacy-led, health and wellbeing enterprise already holds a 26% stake in AmerisourceBergen, which is part of their long-term strategic relationship, formed in 2013. That relationship comprises a 10-year pharmaceutical distribution contract with AmerisourceBergen.
We believe, Walgreen’s latest decision to acquire AmerisourceBergen’s remaining stake, comes close on the heels of its rival CVS Health’s (CVS - Free Report) gigantic $69-billion acquisition deal of health insurer, Aetna Inc . According to a Reuters report, the Walgreens-AmerisourceBergen integration, similar to the CVS-Aetna deal, is likely to move toward a vertical consolidation, combining all members of a supply chain.
This apart, some analysts believe that this move may be in response to Amazon’s latest decision to step into the multibillion-dollar pharmaceutical industry. Notably, in December 2017, Amazon.com, Inc (AMZN - Free Report) had acquired pharmacy licenses in a dozen states.
As far as the news revolving around Walgreens-AmerisourceBergen agreement is concerned, many market researchers view this takeover rumor to be strategic, although the companies themselves have remained silent on this speculative issue.
Significantly, Walgreens has a market capitalization of $67.82 billion while the same for AmerisourceBergen remains at $19.65 billion.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>