Walgreens Boots Alliance Early-Settles Certain Prepaid Variable Share Forward Transactions and Sells Related Shares of Cencora For Approximately $300 Million of Proceeds
Transaction Highlights
- Walgreens Boots Alliance announces early settlement of certain prepaid variable share forward transactions with respect to shares of Cencora for delivery of an aggregate 6.1 million shares
- Concurrent with the early settlement, the Company executed a sale of the remaining 1.3 million shares of Cencora pledged under the early settled contracts. The Company receives approximately $300 million from the early settlement and the concurrent sale of shares
- Following today's early settlement, the Company owns approximately 12.6 million shares of Cencora pledged under the remaining prepaid variable share forward contracts, which have the potential to provide additional cash proceeds at maturity. These remaining prepaid variable share forward contracts are mainly scheduled to mature during March, June and September of calendar year 2025.
- Use of proceeds will primarily be for debt paydown, as the Company proactively seeks to address its debt maturities in fiscal year 2026, and for general corporate purposes
Walgreens Boots Alliance, Inc. (NASDAQ:WBA) has agreed to the early settlement of certain prepaid variable share forward transactions it had previously entered into with various financial institutions, with respect to shares of Cencora, Inc. (NYSE:COR). Under these transactions, the Company had previously received cash payments in an aggregate amount of approximately $1.1 billion on or about the dates of first entering into them. The transactions were scheduled to mature during March and June of calendar year 2026.
As part of the early settlement of the transactions prior to their scheduled maturities, WBA will deliver to the financial institutions an aggregate of approximately 6.1 million shares of Cencora, while paying a net aggregate cash payment of approximately $20 million. The transaction fulfills the Company's obligations to deliver shares at a future date to each financial institution participating in the early settlement. These contracts have accreted cash value to the Company as a result of participation in the appreciation of Cencora's stock since entering the transactions in 2023. The early settlement together with the concurrent share sale realizes the embedded cash value that exists in the prepaid variable share forwards.
Concurrent with these early settlements, WBA today announced that it has sold shares of Cencora common stock in an unregistered block trade pursuant to Rule 144 for proceeds of approximately $265 million, and has sold additional shares in a share repurchase by Cencora for additional proceeds of approximately $50 million.
Proceeds to WBA will be used primarily for debt paydown and general corporate purposes. The proceeds from these transactions as well as other actions, including the recent suspension of the dividend, further help position the Company to address its upcoming debt maturities in fiscal 2026.
Walgreens Boots Alliance's ownership of Cencora's common stock has decreased from approximately 10 percent to approximately six percent.
The sale has no impact to the long-term partnership between the two companies. Walgreens Boots Alliance remains fully committed to the strategic, mutually beneficial relationship with Cencora, which has been a strong and trusted partner since 2013. Chief Operating Officer, International of Walgreens Boots Alliance, Ornella Barra, will continue to serve on Cencora's Board of Directors.
About Walgreens Boots Alliance
Walgreens Boots Alliance (NASDAQ:WBA) is an integrated healthcare, pharmacy and retail leader serving millions of customers and patients every day, with a 175-year heritage of caring for communities.
A trusted, global innovator in retail pharmacy with approximately 12,500 locations across the U.S., Europe and Latin America, WBA plays a critical role in the healthcare ecosystem. Through dispensing medicines, improving access to pharmacy and health services, providing high quality health and beauty products and offering anytime, anywhere convenience across its digital platforms, WBA is shaping the future of healthcare in the thousands of communities it serves and beyond.
WBA employs approximately 311,000 people, with a presence in eight countries and consumer brands including: Walgreens, Boots, Duane Reade, No7 Beauty Company and Benavides. The Company is proud of its contributions to healthy communities, a healthy planet, an inclusive workplace and a sustainable marketplace. In fiscal 2024, WBA scored 100% on the Disability Equality Index for disability inclusion.
More Company information is available at www.walgreensbootsalliance.com.
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