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McKesson boosts bid for German drug wholesaler Celesio


By Rachel Landen
Posted: January 9, 2014 - 2:30 pm ET
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McKesson Corp. agreed to up its bid for German drug wholesaler and retail pharmacy operator Celesio after one of Celesio's major shareholders rejected the original offer as too low.

San Francisco-based McKesson offered in October to purchase Celesio for 23 euros per share, or about 6.1 billion euros ($8.3 billion) including debt. Though Franz Haniel & Cie., which owns 50.01% of Celesio, approved the deal, hedge fund and second-largest shareholder Elliott Management Corp. blocked its acceptance while holding out for a higher offer.

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Thursday, in what McKesson called its “best and final offer,” the company raised its bid to 23.5 euros per share for a revised total in the neighborhood of $6.2 billion euros ($8.4 billion). McKesson's bid is contingent on it securing 75% of Celesio's shares, including any convertible bonds, by midnight on Thursday in Germany.

An acquisition would mean new business lines, increased volume and a greater international presence for McKesson, which is one of the largest wholesale drug distributors in the U.S. Between McKesson and rivals AmerisourceBergen and Cardinal Health, the three companies dominate about 95% of the U.S. market share for drug distribution.

Celesio, headquartered in Stuttgart, owns the Lloyd's pharmacy chain in the United Kingdom, and according to the company, supplies 65,000 pharmacies and hospitals daily with up to 130,000 pharmaceutical products.

Follow Rachel Landen on Twitter: @MHrlanden


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