Walgreens cuts stake in AmerisourceBergen through $1 billion share sale

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FILE PHOTO: People walk by a Walgreens, owned by the Walgreens Boots Alliance, Inc., in Manhattan, New York City

(Reuters) -Walgreens Boots Alliance has sold some AmerisourceBergen Corp’s shares for proceeds of $1 billion, the U.S. drugstore chain said on Thursday, further cutting its ownership in the drug distributor, by 3% to about 17%.

Walgreens, which will remain AmerisourceBergen’ largest shareholder, said it would use the proceeds to pay down debt and to fund strategic priorities, including Walgreens-backed VillageMD’s $9 billion acquisition of urgent care provider Summit Health.

Walgreens had earlier committed $3.5 billion, through an even mix of debt and equity, to support the deal, which was struck on Nov. 7.

A day later, Walgreens said it cut its stake in AmerisourceBergen (ABC) to about 20% from about 26% though a public offering of 10 million ABC shares.

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The latest share sale includes $200 million that ABC will buy back from Walgreens under its share repurchase program, ABC said in a separate press release, adding these shares would be held in treasury.

The share sale has no impact on the long-term partnership between the two companies, Walgreens said.

(Reporting by Siddharth Jindal and Maria Ponnezhath in Bengaluru; Editing by Savio D’Souza)