DEERFIELD, Ill. — Moving another step closer to completing its merger with Alliance Boots GmbH, Walgreen Co. has announced bond offerings in the United States and Europe totaling more than $10 billion.
This month, Walgreens Boots Alliance Inc. — the holding company formed for the combined entity — priced an underwritten public offering of unsecured, unsubordinated notes including $750 million of floating rate notes due 2016, $750 million in 1.75% notes due 2017, $1.25 billion in 2.70% notes due 2019, $1.25 billion in 3.30% notes due 2021, $2 billion in 3.80% notes due 2024, $500 million in 4.50% notes due 2034 and $1.5 billion in 4.80% notes due 2044.
The sale of the notes — one of the largest bond sales of the year, The Wall Street Journal reported — was expected to close November 18, pending customary closing conditions.
Just days after the first bond offering, Walgreens Boots Alliance priced another public offering of more than $2 billion in unsecured, unsubordinated notes, consisting of £400 million in 2.875% notes due 2020 ($634.4 million), £300 million in 3.60% notes due 2025 ($475.8 million) and €750 million in 2.125% notes due 2026 ($931.12 million). That offering, subject to customary closing conditions, was slated to close November 20.
The net proceeds from both bond sales would mainly be used to fund a portion of the cash consideration to acquire the remaining 55% interest in Alliance Boots, to refinance Alliance Boots’ borrowings, and/or to pay related fees and expenses, according to Walgreens.
Walgreens completed the first step of the Alliance Boots deal in August 2012, buying a 45% stake in the company for $4 billion in cash and 83.4 million shares of Walgreens common stock, or about $6.7 billion in total. In the second step, Walgreens is set to purchase the rest of Alliance Boots for £3.133 billion (about $5 billion) in cash and more than 144.3 million shares (about $10 billion) of Walgreens common stock.
Once the second step is completed, plans call for Walgreen Co. to immediately be reorganized into a holding company structure and become a subsidiary of the Walgreens Boots Alliance. Walgreens and Alliance Boots announced the formation of the U.S.-based Walgreens Boots Alliance this past August.
