FRANKFURT (Reuters) - U.S. drugs distributor McKesson made an $8.3 billion takeover bid for German peer Celesio to boost its purchasing power with global drug makers.
San Francisco-based McKesson, the largest U.S. drugs wholesale group, struck a deal to purchase the 50.01 percent stake in Celesio owned by the diversified holding company Franz Haniel & Cie and is offering to buy up the remaining shares for 23 euros ($31.7) apiece, it said on Thursday.
It will also make a public tender offer for the outstanding convertible bonds of Celesio.
"The combined company will be one of the largest pharmaceutical wholesalers and providers of logistics and services in the healthcare sector worldwide," the U.S. group said.
The 23 euro per share bid represents a premium of about 43 percent over the stock price since speculation began in June that majority owner Haniel might sell its stake.
McKesson is offering 53,117.78 euros for each of Celesio's outstanding convertible bonds due in 2014 and 120,798.32 euros apiece for convertible bonds due in 2018.
The total transaction, including the assumption of Celesio's outstanding debt, values the target at about $8.3 billion (6.1 billion euros), McKesson added. Celesio said its management and supervisory boards welcomed the takeover offer.
Shares in Celesio were indicated to open 5.4 percent higher on Thursday, according to pre-market data. They closed 6.1 percent higher at 21.725 euros on Wednesday, while McKesson's stock rose 0.7 percent to $143.05.
SEEKING PURCHASING POWER
McKesson will gain about 22 billion euros ($30.3 billion) in annual revenues from Celesio, creating a more than $150 billion global drugs wholesale and pharmacies group.
That would by far eclipse by size another transatlantic tie-up in drugs trading, the purchase of a 45 percent stake in European pharmacy chain Alliance Boot's by U.S. peer Walgreen Co. last year.
McKesson and its closest U.S. rivals AmerisourceBergen and Cardinal Health, which between them account for 95 percent of the U.S. market, are all looking to grow abroad to gain purchasing power with drug makers.
McKesson plans to fund part of the deal with cash, with the rest covered by bridge financing. Details of financing will depend on how many Celesio shares and convertible bonds are tendered, it said.
It expects the deal to add between $1.00 and $1.20 to its adjusted earnings per share in the first 12 months following completion, assuming it acquires 100 percent of Celesio. Its offer is conditional upon it obtaining at least 75 percent.
By the fourth year, the acquisition will result in savings of between $275 million and $325 million, it said.
McKesson said it expected its offers for Celesio's shares and bonds to start during its fiscal third quarter through end-December, and conclude in its fiscal fourth quarter but not before January 17.
The offer values Celesio including its debt at about 11 times expected earnings before interest, taxes, depreciation and amortization (EBITDA) for this year, above the 9.8 multiple its U.S. suitor is trading at.
That is in line with the multiple that Walgreen Co. paid for the stake in Alliance Boots last year.
($1 = 0.7256 euros)
(Reporting by Ludwig Burger; Editing by Maria Sheahan and Victoria Bryan)
- Finance
- Mergers, Acquisitions & Takeovers
- McKesson
- Celesio
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