US drugstore operator Walgreen Co (NYSE:WAG) and its Swiss joint venture partner Alliance Boots GmbH said they had received the right to buy together up to 23% of AmerisourceBergen Corp (NYSE:ABC) under a ten-year supply agreement with the US pharmaceutical services provider.
The two companies can initially purchase a 7% stake on the open market, which is valued at USD800m (EUR620m), according to Reuters. They were also granted warrants to receive an additional 16% stake, exercisable in two tranches of equal sizes. The first tranche can be exercised at a strike price of USD51.50 in March 2016 and the second one as of March 2017 at a price of USD52.50, the pair said.
Through the deal, AmerisourceBergen will receive the right to distribute Walgreen’s branded and generic pharmaceutical products, which it will access through the recently established JV Walgreens Boots Alliance Development GmbH.
AmerisourceBergen has so far supplied only speciality items to Walgreen. The agreement is expected to result in substantial operational benefits for Walgreen and to modestly increase its earnings for fiscal 2014.
The stake purchase is subject to customary closing conditions.