Walgreen Co. has priced a public offering of senior notes totaling $4 billion, some of which will be used to finance recent acquisitions.


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Retail News Breaks

Walgreens initiates debt offering

September 11th, 2012

DEERFIELD, Ill. – Walgreen Co. has priced a public offering of senior notes totaling $4 billion, some of which will be used to finance recent acquisitions.

Walgreens said Monday evening that the underwritten offering of senior notes includes $550 million of floating rate notes due in 2014, $750 million of 1.000% notes due in 2015, $1 billion of 1.800% notes due in 2017, $1.2 billion of 3.100% notes due in 2022, and
$500 million of 4.400% notes due in 2042.

The sale of the notes is slated to close on Thursday, according to the drug chain.

Plans call for Walgreens to use the net proceeds from the offering to repay an unsecured 364-day bridge term loan, dated July 23, 2012, which the company said was used to finance part of its deal to acquire a 45% stake in Alliance Boots and for general corporate purposes, including the acquisition of USA Drug.

Walgreens finalized its initial investment in Alliance Boots — the purchase of the 45% equity interest for $6.7 billion in cash and stock — early last month. Completion of the first step of the two-phase agreement, announced in June, came about a month earlier than the projected Sept. 1 closing date.

Under the deal, Walgreens has the option to acquire the remaining 55% of Alliance Boots in about three years for $9.5 billion in cash and stock.

Walgreens announced its $438 million acquisition of USA Drug just weeks after the Alliance Boots deal. USA Drug's 144 stores, located mostly in the Mid-South, operate under the banners USA Drug, Super D Drug, May’s Drug, Med-X and Drug Warehouse.

 

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