Walgreens Boots Alliance has sold more shares of drug distributor Cencora for proceeds of about $300 … [+]
Walgreens Boots Alliance has sold more shares of drug distributor Cencora for proceeds of about $300 million, “primarily for debt paydown and general corporate purposes,” the company said Thursday night.
The stock sale, which comes as chief executive officer Tim Wentworth works on a financial turnaround of the iconic drugstore chain, brings Walgreens stake in Cencora down to 6% from 10%. Walgreens first bought a stake in the drug distributor in 2013 and its ownership share grew to more than 25% just six years ago.
But the latest Cencora stock sale comes a week after Walgreens suspended its quarterly dividend payments to stockholders for the first time in nearly a century as the company works to free up cash to fund the company’s “broader long-term turnaround,” Walgreens said last week. The drugstore giant is already in the early stages of closing more than 1,200 stores.
Walgreens began reducing its stake in the distributor, formerly known as AmerisourceBergen, and other businesses in the last four years to raise money for other priorities such as the creation of a new specialty pharmacy business as well as putting more healthcare services in its stores.
Thursday night’s announcement was part of a broader press release regarding Walgreens selling “certain prepaid variable share forward transactions,” the company said. “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.”
Walgreens said 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.”
Though Walgreens stake in Cencora continues to fall, the company said 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,” Walgreens said. “Chief Operating Officer, International of Walgreens Boots Alliance, Ornella Barra, will continue to serve on Cencora’s Board of Directors.”
