CVS' US$2.9bn Bid For Longs

August 2008 | M&A News Alert

Yet more activity in the pharmaceutical industry, as US giant CVS Caremark agrees to pay US$2.9bn for Longs Drug Stores, in a bid to penetrate the lucrative West coast market. The US$71.50 per share cash offer represents a 32% premium over Longs' closing price on August 11 2008. CVS plans to finance the acquisition, which includes up to US$360mn in debt, with a US$1.5bn bridge loan, together with existing cash and liquidity. Subject to review under the Hart-Scott-Rodino Act, the deal is expected to be completed by the end of 2008. CVS expects to achieve significant cost synergies of US$100mn in 2009 and US$140-150mn in 2010, resulting from purchasing efficiencies and a reduction in SG&A expense.

If you would like to subscribe to Corporate Financing Week and gain instant access to this article, please click here to subscribe.

If you would like to take a trial to Corporate Financing Week please click on the trial link below.