AmerisourceBergen Corp.'s board of directors has authorized a new $750 million share repurchase program.

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AmerisourceBergen OKs $750 million buyback plan

August 9th, 2013

VALLEY FORGE, Pa. – AmerisourceBergen Corp.'s board of directors has authorized a new $750 million share repurchase program.

The pharmaceutical wholesaler said Thursday that it has $446.1 million remaining on its November 2012 stock buyback authorization, bringing the total amount authorized for repurchases to $1.2 billion.

So far for fiscal 2013, which ends on Sept. 30, AmerisourceBergen has spent $401.1 million on repurchases of outstanding shares of its common stock. The company said it now has about 231 million common shares outstanding.

"Our share repurchases during fiscal year 2013 and our new program demonstrate our continued commitment to delivering long-term shareholder value," Steve Collis, AmerisourceBergen president and chief executive officer, said in a statement. "While our expectations for share repurchases over the next few quarters have not changed, the new authorization gives us significant longer-term flexibility."

Also on Thursday, the board declared a cash dividend of 21 cents per share of common stock, payable on Sept. 3 to shareholders of record as of Aug. 19. 

In reporting third-quarter financial results late last month, Collis said AmerisourceBergen is on track in readying for its new distribution arrangement with Walgreen Co. under its partnership with the drug chain and Alliance Boots, announced in March.

Along with enabling Walgreens and Alliance Boots to acquire an equity interest in AmerisourceBergen, the deal broadens the relationship between AmerisourceBergen and Walgreens beyond specialty pharmaceuticals to a 10-year primary distribution pact for branded and generic drugs. The agreement also calls for AmerisourceBergen to access generics and related pharmaceuticals through the Walgreens and Alliance Boots joint venture, Walgreens Boots Alliance Development GmbH.

Starting Sept. 1, AmerisourceBergen is slated to begin distributing branded drugs that Walgreens has historically sourced from other distributors and suppliers. And then beginning in calendar year 2014, the distribution will increasingly include generic drugs that Walgreens has typically has self-distributed.

The third quarter also saw AmerisourceBergen wrap up the sale of AmerisourceBergen Canada Corp. (ABCC), its Canadian pharmaceutical distribution business, to Kohl & Frisch Ltd. as well as complete the sale of AndersonBrecon, its contract packaging business, to Frazier Healthcare. 

"In our June quarter, AmerisourceBergen delivered solid performance and made significant progress on strategic initiatives," Collis stated. "We completed two previously announced divestitures, obtained the required regulatory approvals on certain aspects of our new strategic long-term relationship with Walgreen Co. and Alliance Boots GmbH, and have begun to prepare our network for the onboarding of the new Walgreens distribution contract in September. In addition, we recently enhanced our financial flexibility by increasing the borrowing capacity of our revolver and our securitization programs. Not only are we on track to meet our objectives for the full fiscal year, but we have taken important steps to strengthen our ability to generate sustainable long term growth that benefits all of our stakeholders."