Walgreens Boots Alliance has recently announced the sale of more shares of drug distributor Cencora, generating proceeds of approximately $300 million. The company stated that the funds will be primarily used for debt repayment and general corporate purposes. This move comes as part of CEO Tim Wentworth’s efforts to navigate a financial turnaround for the renowned drugstore chain.
The stock sale has reduced Walgreens’ stake in Cencora from 10% to 6%. This strategic decision follows the recent suspension of quarterly dividend payments to stockholders, a rare move for the company in nearly a century. The suspension was aimed at freeing up cash to support the broader long-term turnaround initiatives initiated by Walgreens. As part of this transformation, the company is also in the process of closing over 1,200 stores.
Over the past four years, Walgreens has been gradually divesting its holdings in Cencora, formerly known as AmerisourceBergen, and other businesses to raise capital for key priorities. These include the establishment of a new specialty pharmacy business and the integration of additional healthcare services within its stores.
The recent announcement by Walgreens regarding the sale of prepaid variable share forward transactions marks a significant step in the company’s financial strategy. The early settlement of these transactions, along with the sale of the remaining 1.3 million shares of Cencora, has contributed to the $300 million in proceeds. These funds, combined with other measures such as the dividend suspension, are intended to bolster the company’s position in addressing upcoming debt maturities in fiscal 2026.
Despite the diminishing stake in Cencora, Walgreens emphasized that the sale will not impact the long-term partnership between the two companies. The drugstore giant remains fully committed to its strategic relationship with Cencora, a trusted partner since 2013. Ornella Barra, Chief Operating Officer, International of Walgreens Boots Alliance, will continue to serve on Cencora’s Board of Directors, underscoring the enduring collaboration between the two entities.
