Walgreens Boots Alliance has sold shares of AmerisourceBergen for initial proceeds of $2.85 billion, which will be used “primarily for debt paydown and general corporate purposes” including acceleration of the company’s healthcare strategy and transformation.
Walgreens said Thursday night said its stock ownership stake in AmerisourceBergen, a large drug distributor, has “is expected to decrease as a result of the concurrent share repurchase by AmerisourceBergen to approximately 16%.”
Walgreens Thursday said it has sold shares of AmerisourceBergen “common stock pursuant to prepaid variable share forward transactions executed through a registered public offering for current proceeds of approximately $1.6 billion,” the company said. :In addition, Walgreens Boots Alliance entered into a concurrent share repurchase by AmerisourceBergen for proceeds of approximately $250 million, subject to the consummation of the purchase and sale of the shares of AmerisourceBergen in the registered public offering.”
The stock sale comes as Walgreens has been spending billions of dollars to expand its primary care business and has used a mix of equity and debt to do so. Most notably, Walgreens has invested in VillageMD, which last year announced plans to buy Summit Health for $8.9 billion to expand doctor-staffed clinics across the country. The transaction includes investments from Walgreens, which already owns about 53% of VillageMD, and Cigna’s health services business Evernorth.
The combination comes as Walgreens and rivals CVS Health, Walmart and Amazon push deeper into providing medical care in drugstores and other retail settings.
Amazon earlier this year closed on its $3.9 billion acquisition of One Medical, which operates more than 220 primary care offices in more than 28 U.S. markets.
Meanwhile, CVS Health, which owns the health insurer Aetna, has been doing some wheeling and dealing of its own. CVS last year bought the home care company Signify Health for $8 billion and in May completed its acquistion of Oak Street Health for $10.6 billion in cash, adding a large network of doctor-staffed clinics primarily used by seniors.
Other health insurers, like UnitedHealth Group, have long been gobbling up doctor practices and other primary care operations including urgent care and surgery centers via its Optum health services business. And Walmart has opened several new doctor-staffed “Walmart Health” centers in several states and is doubling the number of such facilities by the end of next year to around 80.