Walgreens Boots Alliance Sells Shares of Cencora for $400 Million of Proceeds

Rhea-AI Summary

Walgreens Boots Alliance (WBA) has sold approximately $400 million worth of Cencora (COR) shares through a stock repurchase agreement, decreasing its ownership from 13% to 12%.

The proceeds will be used mainly for debt reduction and general corporate purposes, supporting WBA's strategy to enhance its health services rooted in retail pharmacy.

The sale does not affect the ongoing collaboration or long-term strategic partnership between the companies. Ornella Barra, COO International of WBA, will continue to serve on Cencora's Board of Directors.

Positive

• Walgreens Boots Alliance raised $400 million from selling Cencora shares.
• Proceeds will be used primarily for debt paydown, improving financial stability.
• The sale supports WBA's capital-efficient health services strategy.
• No impact on the ongoing collaboration and long-term strategic partnership with Cencora.
• Ornella Barra remains on Cencora's Board, ensuring continued strategic alignment.

Negative

• WBA's ownership in Cencora decreased from 13% to 12%, slightly reducing its influence.

Insights

Financial Analyst

Walgreens Boots Alliance's sale of Cencora shares for $400 million is primarily aimed at reducing debt and addressing general corporate needs. This move can positively impact Walgreens’ balance sheet by decreasing its debt burden, which is beneficial for financial stability and can potentially improve credit ratings. Debt reduction usually leads to lower interest expenses, freeing up cash flow for other strategic investments. While the overall ownership stake in Cencora has only slightly decreased from 13% to 12%, this transaction signals a cautious approach toward capital management. Retail investors should understand that this is a strategic decision aimed at optimizing financial health rather than indicating any lack of confidence in Cencora.

Market Research Analyst

By selling a portion of its Cencora shares, Walgreens Boots Alliance is signaling a strategic shift towards a more capital-efficient business model centering around its health services. The decision to use the proceeds for debt paydown is particularly notable in the current economic climate, where interest rates are relatively high. This move could be seen as Walgreens positioning itself to weather potential economic uncertainties by strengthening its financial base. Investors should note that reducing debt can provide more financial flexibility, allowing the company to invest in growth areas without the pressure of high-interest obligations. However, it’s worth keeping an eye on how effectively Walgreens will utilize the remaining proceeds for ‘general corporate purposes’ and whether this leads to tangible improvements in their core operations.

Healthcare Sector Analyst

Walgreens Boots Alliance's emphasis on maintaining its strategic partnership with Cencora while reducing its stake highlights the importance of their ongoing collaboration in the healthcare sector. This partnership continues to be a key element of Walgreens' strategy to enhance its health services offering. The retained board membership implies that Walgreens will still have significant influence over Cencora’s strategic direction. This transaction seems to be a strategic financial adjustment rather than a shift in business strategy. For retail investors, it's important to understand that the core business relationship remains intact, ensuring that the benefits derived from this partnership will continue to support Walgreens’ broader healthcare ambitions.

• Walgreens Boots Alliance announces sale of Cencora, Inc. shares for proceeds of approximately $400 million from Cencora stock repurchase
• Proceeds to Walgreens Boots Alliance will be used primarily for debt paydown and general corporate purposes
• No change to ongoing collaboration and long-term strategic partnership

DEERFIELD, Ill.--(BUSINESS WIRE)-- Walgreens Boots Alliance, Inc. (Nasdaq: WBA) today announced that it has sold shares of Cencora, Inc. (NYSE: COR) pursuant to a share repurchase by Cencora in the amount of approximately $400 million.

With the transaction, Walgreens Boots Alliance’s ownership of Cencora’s common stock has decreased from approximately 13 percent to approximately 12 percent.

Proceeds to Walgreens Boots Alliance will be used primarily for debt paydown and general corporate purposes, as the company continues to build out a more capital-efficient health services strategy rooted in its retail pharmacy footprint, to deliver care for communities and create value for partners.

The sale has no impact to the long-term partnership between the two companies. Walgreens Boots Alliance remains fully committed to the strategic, mutually beneficial relationship with Cencora, which has been a strong and trusted partner since 2013. Chief Operating Officer, International of Walgreens Boots Alliance, Ornella Barra, will continue to serve on Cencora’s Board of Directors.

About Walgreens Boots Alliance

Walgreens Boots Alliance (Nasdaq: WBA) is an integrated healthcare, pharmacy and retail leader serving millions of customers and patients every day, with a 170-year heritage of caring for communities.

A trusted, global innovator in retail pharmacy with approximately 12,500 locations across the U.S., Europe and Latin America, WBA plays a critical role in the healthcare ecosystem. The Company is reimagining local healthcare and well-being for all as part of its purpose – to create more joyful lives through better health. Through dispensing medicines, improving access to a wide range of health services, providing high quality health and beauty products and offering anytime, anywhere convenience across its digital platforms, WBA is shaping the future of healthcare.

WBA employs more than 315,000 people and has a presence in eight countries through its portfolio of consumer brands: Walgreens, Boots, Duane Reade, the No7 Beauty Company and Benavides in Mexico. Additionally, WBA has a portfolio of healthcare-focused investments located in several countries, including China and the U.S.

The Company is proud of its contributions to healthy communities, a healthy planet, an inclusive workplace and a sustainable marketplace. WBA has been recognized for its commitment to operating sustainably: the Company is an index component of the Dow Jones Sustainability Indices (DJSI) and was named to the 100 Best Corporate Citizens 2022.

More Company information is available at www.walgreensbootsalliance.com.

(WBA-GEN)

View source version on businesswire.com: https://www.businesswire.com/news/home/20240522162365/en/

 WBA Media Relations

 USA / Jim Cohn, +1 224 813 9057

 International, +44 (0)20 7980 8585

WBA Investor Relations

Brian Holzer, +1 847 315 2922

Source: Walgreens Boots Alliance

FAQ

What is the value of the Cencora shares sold by Walgreens Boots Alliance?

Walgreens Boots Alliance sold Cencora shares for approximately $400 million.

How will Walgreens Boots Alliance use the proceeds from the Cencora share sale?

The proceeds will be used primarily for debt paydown and general corporate purposes.

How has the sale affected Walgreens Boots Alliance's ownership in Cencora?

The sale decreased Walgreens Boots Alliance's ownership in Cencora from 13% to 12%.

Will the sale impact Walgreens Boots Alliance's partnership with Cencora?

No, the sale will not impact the ongoing collaboration or long-term strategic partnership with Cencora.

Who will continue to represent Walgreens Boots Alliance on Cencora's Board of Directors?

Ornella Barra, COO International of Walgreens Boots Alliance, will continue to serve on Cencora's Board of Directors.