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McKesson acquires Celesio

Friday, January 24, 2014

McKesson, a North American healthcare services and information technology company, has reached an agreement with Franz Haniel to acquire its entire holding of Celesio shares for $32.24 per share. In a separate and subsequent agreement, McKesson announced the acquisition of Celesio convertible bonds from Elliott. These agreements are not subject to any closing conditions and the transactions are expected to close within 10 business days. After the close of the agreements, McKesson will own more than 75% of Celesio shares on a fully diluted basis.

John H. Hammergren, chairman and CEO of McKesson, said, “We look forward to bringing together the strengths of the McKesson and Celesio organizations so we can provide our customers with more efficient delivery of healthcare products and services around the world. Our customers will benefit from the increased scale, supply chain experience and sourcing capabilities of the combined company, together with enhanced access to innovative technology and business services.”

McKesson and its wholly-owned indirect subsidiary Dragonfly have informed Celesio of their intention to enter into a domination and profit and loss transfer agreement, with Dragonfly as the dominating party and Celesio as the dominated party. McKesson and Dragonfly expect to implement the agreement following the close of the transactions without any further regulatory approval.

McKesson will consolidate the financial results of Celesio during its fiscal fourth quarter ending March 31, 2014, and McKesson’s earnings will reflect its proportionate share of Celesio’s earnings. By the fourth year following the implementation of the domination and profit and loss transfer agreement, McKesson expects to realize annual synergies between $275 million and $325 million.

McKesson intends to launch a voluntary tender offer to the remaining minority holders of Celesio common shares. The offer is expected to commence shortly after the close of the transactions.

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