Walgreen Co. (NYSE: WAG) has announced that it has completed its investment in Alliance Boots, an international pharmacy-led health and beauty group. The deal has received all regulatory approvals despite the size of the deal.
Today’s announcement said, “The Walgreens investment consists of approximately $4.0 billion in cash and 83.4 million shares of Walgreens common stock in exchange for a 45% equity stake in Alliance Boots. Walgreens has the option to proceed to a full combination in approximately three years’ time by acquiring the remaining 55% of Alliance Boots.”
With a $35.80 share price today, the shares included come to a value of just under $3 billion. That in turn puts the value today of about $7 billion.
Today’s news comes shortly after Walgreen and Express Scripts Holding Company (NASDAQ: ESRX) settled their prescription fight. While this is not quite market-moving news for Walgreen, the deal does show that regulatory agencies will continue to allow large deals even by the most dominant of players in the retail drug sales space as long as they are not evident to be highly monopolistic on the surface.
JON C. OGG