8-KLeadership ChangesOther EventsExhibits & Filings

Cencora, Inc. 8-K Report, Executive Changes (May 15, 2014)

Filed May 15, 2014For Securities:COR

Summary

This 8-K filing by AmerisourceBergen Corporation (now Cencora, Inc.) on May 15, 2014, primarily announces the appointment of Gregory D. Wasson to its Board of Directors. Mr. Wasson, the CEO of Walgreens, was appointed as a director designated by Walgreens, stemming from a strategic and commercial relationship between the two companies. This appointment is a direct consequence of Walgreens and its affiliates collectively owning at least 5% of AmerisourceBergen's common stock, as stipulated in their Shareholders Agreement. The filing also reiterates the significant multi-billion dollar primary pharmaceutical distribution arrangement with Walgreens, expected to be fully implemented by the end of fiscal year 2014. Furthermore, it details the rights granted to Walgreens and Alliance Boots to purchase a substantial number of AmerisourceBergen's common stock, both through open market transactions and warrants with specific exercise prices and timelines. These arrangements underscore the deepening strategic ties and potential for future equity stake changes between AmerisourceBergen and Walgreens.

Key Highlights

  • 1Gregory D. Wasson, CEO of Walgreens, appointed to AmerisourceBergen's Board of Directors.
  • 2Wasson's appointment is a result of Walgreens and its affiliates collectively owning 5% or more of AmerisourceBergen's common stock, as per the Shareholders Agreement.
  • 3The Board size was expanded from ten to eleven directors to accommodate the new appointment.
  • 4AmerisourceBergen has a significant multi-billion dollar primary pharmaceutical distribution agreement with Walgreens, nearing full implementation.
  • 5Walgreens and Alliance Boots have rights to acquire up to approximately 19.86 million shares via open market purchases and additional shares through two sets of warrants.
  • 6Wasson will not receive any compensation for his service as a director.
  • 7The filing references prior disclosures regarding the strategic relationship and associated agreements, including the Framework Agreement and Shareholders Agreement.

Frequently Asked Questions

Gregory D. Wasson was appointed as a director because Walgreens and its affiliates, as part of their strategic relationship with AmerisourceBergen, collectively own 5% or more of AmerisourceBergen's common stock. This ownership threshold, as defined in the Shareholders Agreement, grants Walgreens the right to designate one director to the Board.

AmerisourceBergen and Walgreens have a strategic and commercial relationship that includes a multi-billion dollar primary pharmaceutical distribution agreement. This agreement involves AmerisourceBergen distributing pharmaceutical products to all Walgreens pharmacy locations. The relationship also includes potential joint ventures for generic drug access and equity investments by Walgreens into AmerisourceBergen.

Yes, Walgreens will be entitled to designate a second director to the Board upon the later of the full exercise of Warrant 1 or the full acquisition of initial open market shares. However, this right is conditional on Walgreens and its affiliates maintaining a certain ownership percentage. If their collective ownership falls below 14% (but remains at least 5%), they will only be entitled to one director. If ownership drops below 5%, they lose their designation rights entirely.

The warrants represent a potential future increase in Walgreens' equity stake in AmerisourceBergen. Warrant 1 allows for the purchase of shares at $51.50, exercisable starting March 18, 2016. Warrant 2 allows for the purchase of shares at $52.50, exercisable starting March 18, 2017. These instruments, along with open market purchase rights, signify Walgreens' ongoing strategic interest and potential for significant future investment.