AmerisourceBergen Corp. (NYSE:ABC) stock was up today on news of a possible takeover by Walgreens Boots Alliance Inc (NASDAQ:WBA).
Insider sources claim that Walgreens is in early talks to takeover drug distribution company AmerisourceBergen Corp. This would allow WBA to integrate that business into its own and reduce the costs of acquiring drugs.
The source of this report says that there isn’t a current offer up for AmerisourceBergen Corp. They also warn that one may not emerge from the talks. Walgreens already has a 26% stake, 56.9 million shares of ABC stock, and can purchase another 8.4 million shares in the open market.
The possibility of a takeover for AmerisourceBergen Corp. would cement its already-strong relationship with Walgreens. A deal lasting until 2026 has it acting as the primary drug distributor for WBA’s drug services. Plus, it has ABC buying drugs through Walgreen’s purchasing group. The company also has a Walgreen’s executive on its Board of Directors, reports The Wall Street Journal.
It’s unknown how much Walgreens may spend in a possible effort to takeover AmerisourceBergen Corp.. The drug distributor has a market value of $19.6 billion. It’s net income and revenue for the most recent fiscal year was $364.5 million and $153.1 billion, respectively.
Walgreens is likely looking to takeover AmerisourceBergen Corp. to help it better compete against current and future rivals. CVS Health Corp (NYSE:CVS) announced a deal to buy Aetna Inc (NYSE:AET) last year. There’s also talk that Amazon.com, Inc. (NASDAQ:AMZN) may enter the space soon, after recently announcing a deal to help offer healthcare to its employees.
ABC stock was up 8% and WBA stock was up slightly as of Tuesday morning.
As of this writing, William White did not hold a position in any of the aforementioned securities.