DGAP-News: Celesio AG: McKesson announces agreement to purchase Celesio to create leading global Healthcare Services Platform

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| Source: EQS Group AG
DGAP-News: Celesio AG / Key word(s): Offer
Celesio AG: McKesson announces agreement to purchase Celesio to create
leading global Healthcare Services Platform

24.10.2013 / 07:34

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McKesson announces agreement to purchase Celesio to create leading global
Healthcare Services Platform

  - McKesson Corporation to acquire entire holding of Franz Haniel & Cie.
    GmbH, currently representing a 50.01% stake in Celesio AG; will launch
    voluntary tender offers for remaining publicly-traded shares and
    convertible bonds; total transaction valued at $8.3 billion (EUR6.1
    billion)*

  - Customers will benefit from increased supply chain efficiency, enhanced
    global sourcing, and a broad array of innovative technology and
    business services

  - Manufacturing partners and suppliers will benefit from access to new
    markets and the efficiency of a global distribution partner

  - Immediate value creation for Celesio investors at an attractive premium


San Francisco & Stuttgart, Germany - McKesson Corporation [NYSE: MCK]
('McKesson'), a leading North American healthcare services and information
technology company, and Celesio AG [ISIN DE000CLS1001] ('Celesio'), a
leading international wholesale and retail company and provider of
logistics and services to the pharmaceutical and healthcare sectors,
announced today that McKesson has signed an agreement to acquire a majority
stake in Celesio for EUR23 per share and to launch parallel voluntary
public tender offers for the remaining publicly-traded shares and
outstanding convertible bonds of Celesio.  The offer price of EUR23 per
share represents a 39% premium over the three-month volume weighted average
price prior to the market speculation that began on October 8, 2013.  The
total transaction, including the assumption of Celesio's outstanding debt,
is valued at approximately $8.3 billion (EUR6.1 billion)*.

McKesson and Celesio will combine to form a global leader in healthcare
services with deep expertise in delivering solutions to pharmacies,
manufacturers, patients and other customers.  The transaction brings
together the strength of two leaders with complementary geographic
footprints, shared values and a heritage of trusted healthcare services -
through pharmaceutical wholesaling, community pharmacy care and information
technology - dating back approximately 180 years.

The combined company will be one of the largest pharmaceutical wholesalers
and providers of logistics and services in the healthcare sector worldwide
and expects to deliver:

  - Exceptional value to customers through increased supply chain
    efficiency and enhanced global sourcing;

  - Global distribution and logistics capabilities that bring new value and
    services to manufacturing partners;

  - A broad array of innovative technology and business services; and

  - Operating best practices across an extensive distribution network on
    three continents.

For more information on the transaction, visit
www.GlobalHealthcareLeader.com.

'The combination of McKesson and Celesio will create a leading global
healthcare services platform that will advance our customers' ability to
deliver better, more efficient healthcare solutions,' said John H.
Hammergren, chairman and chief executive officer, McKesson Corporation. 
'The healthcare industry is evolving rapidly, marked by convergence between
segments and increased globalization.  With today's announcement, we will
bring together the strengths and expertise of each company to address
global healthcare challenges.'

Mr. Hammergren added: 'We are looking forward to working with Celesio's
management team and employees to provide our customers with more efficient
delivery of healthcare products and services around the world.  Our
customers - from community pharmacies to major hospital networks - will
benefit from the increased scale, supply chain expertise and sourcing
capabilities of the combined company, together with enhanced access to
innovative technology and business services.'

After completion of the transaction, McKesson and Celesio expect to
maintain their own brands and continue to support customers through
existing channels.

'The agreements announced today with McKesson represent an exciting new
chapter for Celesio,' said Marion Helmes, speaker of the Celesio AG
management board and chief financial officer.  'This transaction is about
growth, it positions our operations for success and brings benefits for all
Celesio stakeholders.  This combination allows two market leaders with
complementary geographic footprints to work together in an increasingly
global market segment.'

Ms. Helmes added: 'Both companies have a long history of leadership in the
pharmaceutical wholesale and retail pharmacy industries, and our mission
and values are very similar to McKesson's.  We believe that our employees,
all of whom are passionate about the important role they play in the
delivery of quality healthcare services, will benefit from being part of an
even stronger international group.'

The operations of Celesio will be part of McKesson's Distribution Solutions
segment, headed by Paul C. Julian, executive vice president and group
president, who commented: 'We are looking forward to welcoming the
management team and employees of Celesio.  McKesson and Celesio share a
culture of respect for our customers and for the employees who serve them
every day.  The business leaders in McKesson and Celesio have built
relationships with customers over many years and have a deep understanding
of their own unique markets.  We look forward to supporting Celesio and
their business leaders as they implement their currently planned strategy
for growth, and ultimately aligning our organizations more closely in the
areas where we can deliver further value for our customers and
manufacturing partners.'

The combined group is expected to have annual revenues in excess of $150
billion (EUR111 billion*), approximately 81,500 employees worldwide and
operations in more than 20 countries. McKesson and Celesio deliver to
approximately 120,000 pharmacy and hospital locations on a daily basis in
the U.S., Canada, Europe and Brazil, including more than 11,000 pharmacies
that are either owned or are part of a strategic banner or franchise
network of community pharmacies.

 

Transaction structure 

Under the terms of a share purchase agreement between McKesson and Franz
Haniel & Cie. GmbH ('Haniel'), the majority shareholder in Celesio,
McKesson has agreed to acquire Haniel's stake in Celesio, currently
representing 50.01% of the total outstanding shares of the company.  The
share purchase agreement has been approved by McKesson's Board of Directors
and Haniel's Supervisory Board.

McKesson has also entered into a business combination agreement with
Celesio which outlines the key parameters that will facilitate the
combination of both companies and has been approved by McKesson's Board of
Directors and Celesio's Supervisory Board.  The Management Board and the
Supervisory Board of Celesio welcome the takeover offer and the members of
the Management Board intend to accept the takeover offer for any Celesio
shares held by them.

McKesson will launch parallel tender offers for Celesio's publicly-traded
shares at EUR23 per share and its outstanding convertible bonds at a price
corresponding to the value of the underlying shares implied by a EUR23 per
share offer price, which equals EUR53,117.78 per bond for Celesio's
convertible bond due 2014 (principal amount of EUR50,000) and EUR120,798.32
per bond for Celesio's convertible bond due 2018 (principal amount of
EUR100,000).  McKesson expects the tender offers to commence during
McKesson's fiscal third quarter of 2014, ending December 31, 2013, and
conclude in McKesson's fiscal fourth quarter of 2014, but no earlier than
January 17, 2014.

The share purchase from Haniel and the tender offers are subject to certain
closing conditions, including regulatory approvals and the acquisition by
McKesson of a minimum of 75% of the shares of Celesio on a fully diluted
basis.

Upon the successful completion of the tender offers, McKesson will
consolidate the financial results of Celesio, and McKesson's earnings will
reflect its proportionate share of Celesio's earnings.  McKesson expects to
complete the tender offers in its fiscal fourth quarter of 2014, ending
March 31, 2014, and expects to complete the required steps to obtain
operational control of Celesio during McKesson's fiscal 2015.


Financial details

By the fourth year following the completion of the required steps to obtain
operational control of Celesio, McKesson expects to realize annual
synergies between $275 million and $325 million.

McKesson expects to fund a portion of the transaction with cash and has put
a bridge financing facility in place to fund the balance of the
transaction.  The permanent financing structure will be determined by the
timing and the number of Celesio shares and convertible bonds tendered in
the tender offers.  McKesson is committed to maintaining its status as an
investment grade rated company in the final permanent financing structure.

McKesson expects the transaction to be $1.00 to $1.20 accretive to adjusted
earnings per share in the first twelve months following the successful
completion of the tender offers.  The estimated range of accretion assumes
McKesson achieves 100% ownership of the shares of Celesio at the conclusion
of the tender offers.  The final range of accretion will be dependent on
the actual result of the tender offers, the permanent financing structure,
and the estimated operating results of the business.


Conference call details

John Hammergren, chairman and chief executive officer of McKesson, will
provide more information on the transaction on the company's previously
scheduled earnings call on October 24th at 8:30am Eastern Time (5:30am
Pacific Time / 2:30pm Central European Time).  The dial-in number for
individuals wishing to participate on the call is +1 719-234-7317.  Erin
Lampert, senior vice president, Investor Relations, is the leader of the
call, and the password to join the call is 'McKesson.' The conference call
will also be available live and archived on the company's Investor
Relations website at www.mckesson.com/investors.

* Exchange rate: 1 Euro = US$1.35


About McKesson Corporation

McKesson Corporation, currently ranked 14th on the FORTUNE 500, is a
healthcare services and information technology company dedicated to making
the business of healthcare run better. McKesson partners with payers,
hospitals, physician offices, pharmacies, pharmaceutical companies and
others across the spectrum of care to build healthier organizations that
deliver better care to patients in every setting. McKesson helps its
customers improve their financial, operational, and clinical performance
with solutions that include pharmaceutical and medical-surgical supply
management, healthcare information technology, and business and clinical
services. For more information, visit www.mckesson.com.


About Celesio Group 

Celesio is a leading international wholesale and retail company and
provider of logistics and services to the pharmaceutical and healthcare
sectors. The proactive and preventive approach ensures that patients
receive the products and support that they require for optimum care. With
38,000 employees, Celesio operates in 14 countries around the world. Every
day, the group serves over 2 million customers - at 2,200 pharmacies of its
own and 4,100 participants in brand partnership schemes. With 132 wholesale
branches, Celesio supplies 65,000 pharmacies and hospitals every day with
up to 130,000 pharmaceutical products. The services benefit a patient pool
of about 15 million per day.


McKesson Corporation Contacts:

Investors and Financial Media:

Erin Lampert, 415-983-8391 
Erin.Lampert@mckesson.com

Media:

Kris Fortner, 415-983-8352 
Kris.Fortner@mckesson.com

Celesio Group Contacts: 

Investor Relations:

Markus Georgi
+49 711 5001-1208
investor@celesio.com 
 
Creditor Relations:

Marcus Hilger
+49 711 5001-552
finance@celesio.com

Media:

Marc Binder, +49 711 5001-380 
media@celesio.com
Rainer Berghausen, +49 711 5001-549 
media@celesio.com
 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN,
INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION
OF THE RELEVANT LAWS OF SUCH JURISDICTION.

Disclaimer

This press release is for information purposes only and does not constitute
an invitation to make an offer to sell any shares in Celesio AG ('Celesio
Shares'), a company organized under the laws of Germany ('Celesio'), or any
convertible bonds issued by Celesio ('Convertible Bonds'). This press
release does not constitute an offer to purchase Celesio Shares or
Convertible Bonds and is not for the purposes of making any representations
or entering into any other binding legal commitments.

An offer to purchase Celesio Shares or Convertible Bonds will be solely
made by the respective offer document which is to be published in due
course and is exclusively subject to such offer document's terms and
conditions. The terms and conditions contained in such offer document may
differ from the general information described in this press release.

The terms and conditions of the offer in relation to the Celesio Shares
('Takeover Offer') will be published in the offer document for the Takeover
Offer only after the permission by the German Federal Financial Supervisory
Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) has been
obtained. Investors and shareholders of Celesio are strongly advised to
read the relevant documents regarding the Takeover Offer published by
Dragonfly GmbH & Co. KGaA ('Dragonfly'), a wholly owned subsidiary of
McKesson Corporation ('McKesson'), which will make the Takeover Offer, when
they become available because they will contain important information.
Investors and shareholders of Celesio will be able to receive these
documents, when they become available, at the website
www.GlobalHealthcareLeader.com. Upon publication, the offer document for
the Takeover Offer will also be available free of charge at a specified
location and will be mailed to investors and shareholders of Celesio free
of charge upon request.

The terms and conditions of the offers in relation to the Convertible Bonds
('Bond Offers' and together with the Takeover Offer, the 'Offers') will be
published in the offer document for the Bond Offers on or about the time as
the offer document for the Takeover Offer will be published. The Bond
Offers will not be subject to the German Securities Acquisition and
Takeover Act (Wertpapiererwerbs- und Übernahmegesetz, ('WpÜG')) and will
not be reviewed by the German Federal Financial Supervisory Authority
(Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin). Investors and
holders of Convertible Bonds are strongly advised to read the relevant
documents regarding the Bond Offers published by Dragonfly, which will make
the Bond Offers, when they become available because they will contain
important information. Investors and holders of Convertible Bonds will be
able to receive these documents, when they become available, at the website
www.GlobalHealthcareLeader.com. Upon publication, the offer document for
the Bond Offers will also be available free of charge at a specified
location and will be mailed to investors and holders of Convertible Bonds
free of charge upon request.

Shareholders of Celesio and holders of Convertible Bonds are strongly
recommended to seek independent advice, where appropriate, in order to
reach an informed decision in respect of the content of the offer documents
and with regard to the Takeover Offer or the Bond Offers.

The Offers will be issued exclusively under the laws of the Federal
Republic of Germany, the Takeover Offer especially under the WpÜG and the
Regulation on the Content of the Offer Document, Consideration for Takeover
Offers and Mandatory Offers and the Release from the Obligation to Publish
and Issue an Offer ('WpÜG Offer Regulation'), and certain applicable
provisions of U.S. securities law. The Offers will not be executed
according to the provisions of jurisdictions (including the jurisdictions
of Australia and Japan) other than those of the Federal Republic of Germany
and certain applicable provisions of U.S. securities law. Thus, no other
announcements, registrations, admissions or approvals of the Offers outside
the Federal Republic of Germany will be filed, arranged for or granted. The
shareholders of Celesio and holders of Convertible Bonds cannot rely on
having recourse to provisions for the protection of investors in any
jurisdiction other than such provisions of the Federal Republic of Germany.
Any contract that will be concluded on the basis of the Offers will be
exclusively governed by the laws of the Federal Republic of Germany and
will to be interpreted in accordance with such laws.

Neither McKesson nor Dragonfly have approved the publication, sending,
distribution, or dissemination of this press release or any other document
associated with the Offers by third parties outside the Federal Republic of
Germany. Neither McKesson nor Dragonfly nor persons acting in concert with
McKesson or Dragonfly within the meaning of Section 2 para. 5 sentence 1
and sentence 3 WpÜG are in any way responsible for the compliance of the
publication, sending, distribution, or dissemination of this press release
or any other document associated with the Offers by a third party outside
of the Federal Republic of Germany to any jurisdiction with legal
provisions other than those of the Federal Republic of Germany.

The publication, sending, distribution or dissemination of this press
release in certain jurisdictions other than the Federal Republic of Germany
may be governed by laws of jurisdictions other than the Federal Republic of
Germany in which the publication, sending, distribution or dissemination
are subject to legal restrictions. Persons who are not resident in the
Federal Republic of Germany or who are for other reasons subject to the
laws of other jurisdictions should inform themselves of, and observe,
those.

This press release is not for release, publication or distribution, in
whole or in part, in, into or from any jurisdiction where to do so would
constitute a violation of the relevant laws of such jurisdiction.

Forward-looking Statements

This press release includes 'forward-looking statements' within the meaning
of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the
U.S. Securities Exchange Act of 1934 (the 'Exchange Act'), as amended, that
are subject to risks and uncertainties and other factors. All statements
other than statements of historical fact are statements that could be
deemed forward-looking statements.

These statements do not represent facts and may be characterized by words
such as 'expect', 'believe', 'estimate', 'intend', 'aim', 'assume' or
similar expressions. Such statements express the intentions, opinions, or
current expectations of McKesson, the persons acting in concert with
McKesson pursuant to Section 2 para. 5 sentence 1 and sentence 3 of WpÜG
and Celesio with respect to possible future events, e.g., regarding
possible consequences of the Takeover Offer and the Bond Offers for
McKesson or Celesio, for those shareholders of Celesio who choose not to
accept the Takeover Offer, for those holders of Convertible Bonds who
choose not to accept the Bond Offers or for future financial results of
McKesson or Celesio. Such forward-looking statements are based on current
plans, estimates and forecasts which McKesson, the persons acting in
concert with McKesson pursuant to section 2 para. 5 sentence 1 and sentence
3 of WpÜG and Celesio have made to the best of their knowledge, but which
do not claim to be correct in the future. Forward-looking statements are
subject to risks and uncertainties that are difficult to predict and
generally cannot be influenced by McKesson, the persons acting in concert
with McKesson within the meaning of Section 2 para. 5 sentence 1 and
sentence 3 of WpÜG or Celesio. The forward-looking statements contained in
this press release could turn out to be incorrect and/or future events and
developments could considerably deviate from the forward-looking statements
contained in this press release. No assurances can be given that the
forward-looking statements in the offer documents in relation to the
Takeover Offer or the Bond Offers which are yet to be published or any
other document associated with the Takeover Offer or the Bond Offers will
be realized. Subject to compliance with applicable law and regulations,
neither McKesson nor Dragonfly intend to update these forward-looking
statements or to undertake any obligation to do so.

If you are a resident of the United States, please read the following:

The Offers will be made for the securities of a non-U.S. company and will
be subject to the disclosure and procedural laws, standards and practices
of jurisdictions other than the U.S., although are intended to be made in
the United States in reliance on, and compliance with, Section 14(e) of the
Exchange Act and Regulation 14E thereunder, as exempted thereunder by Rule
14d-1(c).

In accordance with the intended Offers, McKesson, Dragonfly, certain
affiliated companies and the nominees or brokers (acting as agents) may
make certain purchases of, or arrangements to purchase, Celesio Shares and
Convertible Bonds outside the Offers also during the period in which the
Offers remain open for acceptance. If such purchases or arrangements to
purchase are made they will be made outside the United States and will
comply with applicable law, including the Exchange Act.


End of Corporate News

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24.10.2013 Dissemination of a Corporate News, transmitted by DGAP - a
company of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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Language:    English                                                    
Company:     Celesio AG                                                 
             Neckartalstr. 155                                          
             70376 Stuttgart                                            
             Germany                                                    
Phone:       +49 (0)711 5001-735                                        
Fax:         +49 (0)711 5001-740                                        
E-mail:      investor@celesio.com                                       
Internet:    www.celesio.com                                            
ISIN:        DE000CLS1001                                               
WKN:         CLS100                                                     
Indices:     MDAX                                                       
Listed:      Regulierter Markt in Berlin, Düsseldorf, Frankfurt (Prime  
             Standard), München, Stuttgart; Freiverkehr in Hamburg,     
             Hannover; Terminbörse EUREX                                
 
 
End of News    DGAP News-Service  
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235951 24.10.2013