Bergen Brunswig and AmeriSource to merge
The stock-for-stock transaction will create a new company, called AmeriSource-Bergen, with a predicted $35 billion in annual operating revenue. As a combined company, AmeriSource-Bergen expects to generate enhanced growth, achieve annual operating synergies of more than $125 million by the end of the third year and produce benefits for customers and employees. The new company will base its headquarters in Valley Forge, Pennsylvania, with its west coast management center located in Orange, California.
Under the terms of the agreement, each share of Bergen-Brunswig common stock will be converted into a 0.37 share of AmeriSource-Bergen common stock, while each share of AmeriSource common stock will be converted into one share of AmeriSource-Bergen common stock. The companies also announced that the transaction will be tax free to shareholders.
Upon closing, under the proposed FASB purchase accounting rules, the transaction is expected to be non-dilutive, before synergies and special items. The merger is due to close during the summer of 2001.
"Bringing together AmeriSource and Bergen makes great sense strategically, financially, operationally and culturally. Our two companies have significant complementary strengths that will allow us to deliver enhanced benefits for shareholders, customers, suppliers and employees," said Robert Martini, Chairman and CEO of Bergen Brunswig. Martini will become Chairman of the new company. "This is a combination of equals. But more than that, both companies understand the pharmaceutical distribution business and have corporate cultures that are admired for their focus on quality, efficiency and customer satisfaction.
"We also feel that PharMerica's long-term-care pharmacies and its workers' compensation business, as well as ASD's specialty healthcare offerings of oncology, vaccines and biotech products, which are a part of Bergen's portfolio of businesses, will enhance AmeriSource-Bergen's position in healthcare services by providing greater depth of product offerings."
"As independent companies, AmeriSource and Bergen each have tremendous strengths and excellent growth opportunities," said David Yost, Chairman and CEO of AmeriSource. Yost will become CEO and President of AmeriSource-Bergen. "Together, we will have an enhanced ability to grow and create new offerings and innovative programs to further meet our customers' growth needs. This is a true combination of equals and our approach to the integration will be to select the best people, programs and operations from each company. With the synergy of our
complementary programs and resources, this combination benefits the customers of both companies. In addition, it enhances our confidence that we can sustain a long-term earnings per share growth rate of 20 percent and continue to create significant shareholder value."
AmeriSource was represented by Goldman, Sachs & Co. and Bergen Brunswig was represented by Merrill Lynch & Co.