Walgreens raises $1 billion through share sale to help fund primary care expansion

Walgreens Boots Alliance has reduced its stake in AmerisourceBergen Corp.

Walgreens has sold some AmerisourceBergen Corp's shares for proceeds of $1 billion, reducing its ownership stake in the drug distributor by 3% to about 17%. The drugstore retailer will remain the largest shareholder in AmerisourceBergen.

Walgreens said it plans to use the proceeds from the sale primarily to pay down debt and to fund strategic priorities, including the agreement for Walgreens-backed VillageMD to acquire primary care provider Summit Health-CityMD for $9 million. As part of the deal, which was announced in November, Walgreens will invest $3.5 billion through an even mix of debt and equity.

Shortly after the agreement was announced, Walgreens said it cut its stake in AmerisourceBergen to about 20% from about 26% through a public offering of 10 million ABC shares.

Walgreens became the majority owner of VillageMD through an investment of $5.2 billion in 2021. The company is opening Village Medical primary clinics at its existing drug stores, with the goal to have at least 600 clinics by 2025 and 1,000 clinics by 2027. It is on track to have 200 clinics open by the end of this year.   

The stock sale has no impact to the long-term partnership between the two companies, Walgreens said. Walgreens said it remains fully committed to the strategic, mutually beneficial relationship with AmerisourceBergen, which has been “a strong and trusted partner since 2013. COO, International of Walgreens Boots Alliance, Ornella Barra, will continue to serve on AmerisourceBergen’s board.

Walgreens has been steadily expanding into health care. In September, the company entered into an agreement to buy the remaining 30% stake in specialty pharmacy company Shields Health Solutions that it doesn’t already own for an estimated $1.37 billion. The transaction, which would value Shields at about $4.6 billion, is expected to close by the end of the year.  Walgreens first invested in Shields Health in 2019, taking a minority stake.

In June, Walgreens introduced a clinical trial platform.