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 (AET - Free Report) . 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.
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