Boston, MA 10/25/2013 (wallstreetpr) – In what is going to create the largest pharmaceutical wholesalers the world has ever seen, McKesson Corporation (NYSE:MCK) has decided to purchase its nearest rival, the German Drug Wholesaler Celesio for a consideration of $8.3 billion. The deal would be structured in two parts. At first, McKesson would purchase 50.01% in the German from its majority shareholder Franz Haniel. After this McKesson would become single largest shareholder of Celesio. This would be followed by a tender offer to acquire the remaining shares Celesio at a price of $31.76.
Though financial aspects of the deal would be completed by early 2014, it wouldn’t be before mid 2015, that McKesson would assume Celesio’s operational control. The deal which would create a combined entity with annual revenues of more than $150 billion would be funded by cash on books of McKession and by a smaller bridge loan. Though the deal would create the largest Drug Wholesaler, it would not result in any significant changes in pricing of drugs for end customers. But almost everyone agree that it would help both companies in their purchasing powers when they act as one single entity.
Markets and analyst feel that deal augers well for both companies and would be beneficial in the long run. Both companies have geographical presence in regions not catered by the other one. The buyer McKesson operates primarily in North America while Celesio operates in Brazil and Europe. The combined entity would have operations in 20 countries and is rumored to be employing more than 80,000 employees. Though it may not be too big a hurdle, it should still be noted that the deal requires regulatory approval by financial regulators of Germany, Austria, Ireland and Slovenia.
After the deal announcement, shares of McKesson have been bumped up by almost 5%, which shows that investors are enthusiastic and positive about the deal.
