Walgreens Boots Alliance: Early Settlement of Prepaid Variable Share Forward Transactions

Walgreens Boots Alliance (WBA) has announced the early settlement of certain prepaid variable share forward transactions with respect to shares of Cencora, resulting in the delivery of an aggregate 6.1 million shares. The transaction, which was settled prior to its scheduled maturities, involved the delivery of shares to financial institutions and a concurrent sale of an additional 1.3 million shares. The proceeds from the early settlement and the concurrent sale of shares totaled approximately $300 million, which will be primarily used for debt paydown and general corporate purposes.

Following the early settlement, WBA retains approximately 12.6 million shares of Cencora pledged under the remaining prepaid variable share forward contracts, which are scheduled to mature during March, June, and September of calendar year 2025. These remaining contracts provide additional financial optionality, depending on Cencora's stock performance.

The early settlement of the prepaid variable share forward transactions and the concurrent sale of Cencora shares reflect Walgreens Boots Alliance's strategic assessment of the current and future market conditions for Cencora shares. By settling the contracts early, WBA capitalized on the appreciation of Cencora's stock since entering the transactions in 2023 and secured funds to address its upcoming debt maturities in fiscal 2026 proactively.



The transaction also highlights Walgreens Boots Alliance's commitment to maintaining its strategic, mutually beneficial relationship with Cencora. Despite the reduction in ownership stake from approximately 10% to approximately 6%, WBA remains fully committed to the partnership, with Ornella Barra, Chief Operating Officer, International, continuing to serve on Cencora's Board of Directors.

In conclusion, Walgreens Boots Alliance's early settlement of prepaid variable share forward transactions and the concurrent sale of Cencora shares demonstrate the company's strategic approach to managing its balance sheet, addressing debt obligations, and capitalizing on favorable market conditions. The transaction reflects WBA's commitment to proactive risk management, market trend assessment, and maintaining strategic partnerships.