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McKesson lands new deal to buy Celesio
January 23rd, 2014
SAN FRANCISCO – Just over a week after an unsuccessful bid, McKesson Corp. has reached an agreement with Franz Haniel & Cie. GmbH to acquire all of its shares in Germany-based pharmaceutical distributor Celesio.
McKesson said late Thursday that under the deal it will purchase Franz Haniel & Cie's shares at 23.50 euros, the same per-share price of its failed bid. McKesson had raised its initial offer of 23 euros per share.
And in a separate agreement unveiled Thursday, McKesson said it has acquired Celesio convertible bonds from hedge fund Elliot Management, which previously had resisted the U.S. drug distributor's acquisition bid for the German firm.
The U.S. drug distributor said the agreements aren't subject to any closing conditions, and the transactions are expected to close in 10 business days.
After the close of the deals with Haniel and Elliott, McKesson's ownership of Celesio shares will exceed 75% on a fully diluted basis.
"We are excited to move forward with our acquisition of Celesio," John Hammergren, chairman and chief executive officer of McKesson, said in a statement. "We look forward to bringing together the strengths of the McKesson and Celesio organizations so we can provide our customers with more efficient delivery of healthcare products and services around the world.
The deal brings together the biggest U.S. pharmaceutical distributor with one of the world's largest wholesalers and providers of logistics and services to the pharmaceutical and health care sectors.
"Our customers will benefit from the increased scale, supply chain expertise and sourcing capabilities of the combined company, together with enhanced access to innovative technology and business services," Hammergren added.
McKesson reported that it will consolidate the financial results of Celesio in its fiscal fourth quarter ending March 31, and its earnings will reflect its proportionate share of Celesio's earnings. The transaction is expected to be $1.00 to $1.20 accretive to adjusted earnings per share on a fully diluted basis in the first 12 months after the close of the transactions, assuming 100% ownership in the outstanding common shares of Celesio, according to McKesson.
The company added that it aims to commence a voluntary tender offer to the remaining minority holders of Celesio common shares. That offer is expected to begin shortly after the close of the transactions.
In October, McKesson announced that it had acquired a controlling stake in Celesio from Franz Haniel & Cie., the majority shareholder, a complex deal valued at $8.3 billion and that it planned to start a tender offer for the remaining shares.
But to complete the acquisition, McKesson needed 75% of Celesio's shareholders to approve the deal and made the new offer in the hopes of getting Elliot to agree to sell its shares. Elliot had declined the original offer, saying it felt Celesio was worth more than what McKesson was offering.
McKesson said the raised bid to 23.50 euros per share was its "best and final offer." The price had also been applied to all of Franz Haniel & Cie’s shares. The increased price was aimed at getting Elliot to agree to tender its 25% stake in Celesio. However, on Jan. 13, McKesson announced that it wasn't able to reach the 75% completion condition in its offer for Celesio's outstanding shares and convertible bonds.