McKesson fails, for now, in Celesio buyout bid

Missing the 75% completion of tendered shares causes the company to walk away

The bid for McKesson, the No. 1 drug wholesaler in the world, to acquire Celesio (Stuttgart, Germany), first announced in October, has apparently ended with McKesson failing to get 75% shareholder interest (which is the minimum for the company to have control under German law). In a statement, McKesson CEO John Hammergren said that “While we are disappointed that we were not successful in completing our offers for Celesio, we have a track record of great performance, a strong balance sheet and demonstrated leadership and scale across our markets. We are well positioned and will continue to explore and evaluate opportunities to further strengthen our businesses through our disciplined approach to capital allocation.”

Press reports from Germany say that the Haniel Group, which had tendered its 50.01% ownership to McKesson, were “disappointed” that the sale didn’t go through.

Late last year, resistance to the sale appeared from a hedge fund, Elliott Capital Advisers; McKesson then raised its bid from €23 to €23.50, (the total acquisition would have been around $8.4 billion), but the increase was apparently not enough. On the NYSE, McKesson shares fell over 9% before trading was momentarily suspended, but then immediately began picking up in mid-afternoon.

The failed bid interrupts, for now, the evolving story of Big Three wholesalers both deepening ties to retail pharmacy, and broadening their base of business internationally. The combined trend was kicked off by AmerisourceBergen’s agreement with Walgreens, which also brought in Alliance Boots, a European wholesaler/retailer; Cardinal Health (which has a major presence in China through an acquisition) announced a partnering agreement with CVS Caremark.