Walgreens Boots Alliance has sold more shares of drug distributor Cencora for proceeds of about $1.1 billion, which will be used “primarily for debt paydown and general corporate purposes.”
The stock sale, which comes as chief executive officer Tim Wentworth works on a financial turnaround of the iconic drugstore chain, brings Walgreens stake in Cencora down to 10% from 12%.
“Proceeds to Walgreens Boots Alliance will be used primarily for debt paydown and general corporate purposes, as the company continues to build out a more capital-efficient health services strategy rooted in its retail pharmacy footprint,” Walgreens said in an announcement released Thursday evening. “The sale has no impact to the long-term partnership between the two companies. Walgreens Boots Alliance remains fully committed to the strategic, mutually beneficial relationship with Cencora, which has been a strong and trusted partner since 2013.”
Walgreens began reducing its stake in the distributor, formerly known as AmerisourceBergen, and other businesses in the last three years to raise money for other priorities such as the creation of a new specialty pharmacy business as well as putting more healthcare services in its stores. Walgreens earlier this year sold more stock in Cencora valued at more than $990 million and in May sold more stock valued at $400 million.
Meanwhile, the company in June said it was considering closing hundreds of “underperforming” stores. To turn things around, Walgreens disclosed it was finalizing a “footprint optimization program” to close certain underperforming stores of the company’s more than 8,600 U.S. locations. Manmohan Mahajan, Walgreens executive vice president and global chief financial officer, said “25% is the overall footprint” that executives are evaluating for potential closure.
