Magazine article Drug Topics

AmeriSource, Bergen Brunswig Map Megamerger

Magazine article Drug Topics

AmeriSource, Bergen Brunswig Map Megamerger

Article excerpt

The pace of consolidation in the drug wholesale industry sped up late last month when AmeriSource Health Corp. and Bergen Brunswig Corp. unveiled a merger of equals that they valued at $7 billion.

The new combined company, dubbed AmeriSource-Bergen Corp., will generate approximately $35 billion in annual revenues and achieve more than $125 million in operating savings by the end of the third year after the stock-for-stock deal is finalized. AmeriSource stockholders will own 51% of the new company's estimated 103 million shares outstanding. Each Bergen common stock will be converted to 0.37 share of AmeriSource common stock, while each AmeriSource share will be converted into one share of the new company. If the deal is approved, AmeriSource-Bergen, Cardinal Health Inc., and McKessonHBOC Inc. will control nearly 90% of the drug wholesale industry. The Big Three would be roughly the same size.

The new company's CEO/president will be R. David Yost, AmeriSource's current chairman/CEO. Bergen Brunswig's chairman/CEO Robert E. Martini will become chairman of the combined firm. Company headquarters will be in AmeriSource's Valley Forge, Pa., home but a West Coast management center will be located in Orange, Calif., Bergen's stomping grounds.

Although the two separate independent pharmacy programs sponsored by the wholesalers were described as complementary officials did not discuss whether the new company will merge or alter those programs. AmeriSource has about 2,500 independents in its Family Pharmacy program, while Bergen has more than 2,000 independents enrolled in its Good Neighbor Pharmacy program.

Pharmacists at The Medicine Centre in Portland, Conn., are watching the merger with their fingers crossed, said Gene Memoli, R. …

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