Walgreens and Alliance Boots Announce Strategic, Long-Term Relationship with AmerisourceBergen

  Walgreens and Alliance Boots Announce Strategic, Long-Term Relationship with
  AmerisourceBergen

  - Walgreens expands its existing relationship into 10-year agreement with
              AmerisourceBergen for pharmaceutical distribution

- AmerisourceBergen to collaborate with Walgreens and Alliance Boots on global
                          supply chain opportunities

  - Walgreens and Alliance Boots together to have rights to acquire minority
                     equity position in AmerisourceBergen

Business Wire

DEERFIELD, Ill. -- March 19, 2013

Walgreen Co. (NYSE: WAG) (Nasdaq: WAG), the largest retail drugstore chain in
the United States, and Alliance Boots GmbH, a leading international
pharmacy-led health and beauty group, today announced that they have entered
into an innovative long-term partnership with AmerisourceBergen, one of North
America’s largest pharmaceutical services companies.

This relationship will enable Walgreens, Alliance Boots and AmerisourceBergen
to benefit from greater scale and global opportunities and work together on
programs to improve service levels and efficiencies, while reducing costs and
increasing patient access to pharmaceuticals. Together these three companies
will help address global health care challenges by making it easier for
manufacturers to bring products to market; increasing accessibility to the
benefits of global sourcing and best practices for community pharmacies; and
providing patients with better access to health care. The collaboration will
also generate opportunities to attract partners in new markets and prospects
in existing markets around the globe.

“Today’s announcement marks another step forward in establishing an
unprecedented and efficient global pharmacy-led, health and wellbeing network,
and achieving our vision of becoming the first choice in health and daily
living for everyone in America and beyond,” said Gregory Wasson, President and
Chief Executive Officer of Walgreens. “We are excited to be expanding our
existing relationship with AmerisourceBergen to a 10-year strategic long-term
contract, representing another transformational step in the pharmaceutical
supply chain. We believe this relationship will create a wide range of
opportunities and innovations in the rapidly changing U.S. and global health
care environment that we expect will benefit all of our stakeholders.”

“This agreement with AmerisourceBergen, which we consider to be the
best-positioned pharmaceutical wholesaler in North America, is a promising
development for Walgreens and Alliance Boots following the formation of our
strategic partnership last year,” said Stefano Pessina, Executive Chairman of
Alliance Boots. “We strongly believe that our new partnership with
AmerisourceBergen will deliver long-term shareholder value by creating an
unmatched network of companies that is well positioned to anticipate
increasing market needs and expectations across the world. Together we will
bring tailored solutions to business partners, including manufacturers and
pharmacists, as well as to patients and consumers.”

“AmerisourceBergen is very excited to be joining in this unique global
relationship with two of the undisputed leaders in health care,” said Steven
Collis, President and Chief Executive Officer of AmerisourceBergen. “As we all
recognize the imperatives of health reform not only here in the U.S. but also
globally, we have entered into a unique opportunity to unlock value in the
pharmaceutical supply chain by collaborating to leverage all of our proven
strengths. This new relationship will significantly strengthen and grow our
core business and increase our ability to deliver innovative solutions to our
customers, and long-term benefits to all of our stakeholders. Importantly,
these agreements not only expand our U.S. business, but also provide
opportunities to meaningfully grow our specialty and manufacturer services
businesses internationally.”

Today’s announcement specifically covers:

Branded and Generic Pharmaceutical Distribution Contract: Walgreens and
AmerisourceBergen have agreed to expand their existing relationship beyond the
specialty items currently distributed by AmerisourceBergen to a 10-year
comprehensive primary distribution agreement for branded and generic
pharmaceutical products. The agreement will result in the distribution by
AmerisourceBergen of the branded pharmaceutical products that Walgreens has
historically sourced from distributors and suppliers, effective Sept. 1, 2013.
Over time, beginning in calendar year 2014, this increasingly will include
generic pharmaceutical products that Walgreens historically has
self-distributed. In addition, this agreement is expected to provide
substantial operational benefits for Walgreens, including an enhanced supply
chain with daily deliveries. The terms of the contract are market-based, and
Walgreens expects modest accretion from the agreement for fiscal year 2014,
excluding one-time transaction-related costs.

Global Supply Chain Opportunities: AmerisourceBergen will access generics and
related pharmaceutical products through the recently established Walgreens and
Alliance Boots joint venture, Walgreens Boots Alliance Development GmbH, a
global platform that is designed to make it easier for manufacturers to bring
products to market, improve access to pharmaceuticals for health care
providers worldwide, and yield compelling new offerings to community
pharmacies and others. Walgreens will benefit from AmerisourceBergen’s
expertise in its specialty and manufacturer services businesses, as well as
its wholesale distribution to health systems across the U.S. Alliance Boots
strong international expertise in pharmaceutical wholesaling and distribution
also opens avenues for collaboration on new projects and services.

Equity Position: To align interests and strengthen the long-term relationship,
Walgreens and Alliance Boots together have been granted the right to purchase
a minority equity position in AmerisourceBergen, beginning with the right, but
not the obligation, to purchase up to 7 percent of the fully diluted equity of
AmerisourceBergen in the open market, with associated board representation as
described below. In addition, AmerisourceBergen has granted to Walgreens and
Alliance Boots equity warrants exercisable for 16 percent in the aggregate of
the fully diluted equity of AmerisourceBergen. The first tranche of warrants,
representing 8 percent of the fully diluted equity of AmerisourceBergen, has a
strike price of $51.50 and will be exercisable for a six-month period
beginning in March 2016. The second tranche of warrants, also representing 8
percent of the fully diluted equity of AmerisourceBergen, has a strike price
of $52.50 and will be exercisable for a six-month period beginning in March
2017. The warrants will be allocated equally among Walgreens and Alliance
Boots. Walgreens and Alliance Boots have agreed to customary transfer
restrictions on their equity stake, and have also agreed not to acquire
additional equity of AmerisourceBergen under the terms of a standstill
agreement, subject to the terms and conditions of such agreement, including
certain pre-emption rights and permitted exceptions.

A Walgreens executive will be appointed to AmerisourceBergen’s board upon
Walgreens and Alliance Boots together acquiring a 5 percent equity stake, and
an Alliance Boots executive will be appointed upon exercise in full of the
first warrants. These new board seats will add to AmerisourceBergen’s current
nine-member board.

The equity investment by Walgreens and Alliance Boots is subject to the
receipt of customary regulatory approvals.

Walgreens and Alliance Boots announced a strategic partnership in June 2012 to
create the first global, pharmacy-led health and wellbeing enterprise. As part
of the partnership, Walgreens has invested in a 45 percent equity ownership
stake in Alliance Boots and has the option to proceed to a full combination by
acquiring the remaining 55 percent of Alliance Boots in approximately two
years’ time (both the initial investment and option exclude the Alliance Boots
minority investment in Galenica).

Conference Call / Webcast

AmerisourceBergen will hold a conference call to discuss today’s announcement
beginning at 7:30 a.m. Eastern time today, March 19, and has invited Greg
Wasson of Walgreens and Stefano Pessina of Alliance Boots to be guests on its
call. A link to the conference call will be available through Walgreens
investor relations website at: http://investor.walgreens.com.

About Walgreens

As the nation's largest drugstore chain with fiscal 2012 sales of $72 billion,
Walgreens (www.walgreens.com) vision is to become the first choice for health
and daily living for everyone in America and beyond. Each day, Walgreens
provides more than 6 million customers the most convenient, multichannel
access to consumer goods and services and trusted, cost-effective pharmacy,
health and wellness services and advice in communities across America.
Walgreens scope of pharmacy services includes retail, specialty, infusion,
medical facility and mail service, along with respiratory services. These
services improve health outcomes and lower costs for payers including
employers, managed care organizations, health systems, pharmacy benefit
managers and the public sector. The company operates 8,072 drugstores in all
50 states, the District of Columbia and Puerto Rico. Take Care Health Systems
is a Walgreens subsidiary that is the largest and most comprehensive manager
of worksite health and wellness centers and in-store convenient care clinics,
with more than 700 locations throughout the country.

About Alliance Boots

Alliance Boots is a leading international, pharmacy-led health and beauty
group delivering a range of products and services to customers. Working in
close partnership with manufacturers and pharmacists, we are committed to
improving health in the local communities we serve and helping our customers
and patients to look and feel their best. Our focus is on growing our two core
businesses: pharmacy-led health and beauty retailing and pharmaceutical
wholesaling and distribution.

Alliance Boots has a presence in more than 25* countries and employs over
116,000* people. Alliance Boots has pharmacy-led health and beauty retail
businesses in 11* countries and operates more than 3,330* health and beauty
retail stores, of which just over 3,200* have a pharmacy. In addition,
Alliance Boots has around 625* optical practices, of which around 185* operate
on a franchise basis. Our pharmaceutical wholesale businesses supply
medicines, other healthcare products and related services to more than
170,000* pharmacies, doctors, health centres and hospitals from over 370*
distribution centres in 21* countries.

*Figures are approximations as at 31 March 2012 and include associates and
joint ventures.

Walgreens Cautionary Note Regarding Forward-Looking Statements. Statements in
this release that are not historical, including, without limitation, estimates
of future financial and operating performance, including the amounts and
timing of future accretion and synergies, are forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Words such as "expect," "likely," "outlook," "forecast,
"would," "could," "should," "can," "will," "project," "intend," "plan,"
"goal," “target,” "continue," "sustain," "synergy," "on track," "believe,"
"seek," "estimate," "anticipate," "may," "possible," "assume," variations of
such words and similar expressions are intended to identify such
forward-looking statements. These forward-looking statements are not
guarantees of future performance and involve risks, assumptions and
uncertainties, including, but not limited to, those relating to our commercial
agreement with AmerisourceBergen, the arrangements and transactions
contemplated by our framework agreement with AmerisourceBergen and Alliance
Boots and their possible effects, the Purchase and Option Agreement and other
agreements relating to our strategic partnership with Alliance Boots, the
arrangements and transactions contemplated thereby and their possible effects,
the parties' ability to realize anticipated synergies and achieve anticipated
financial results, the risks associated with transitions in supply
arrangements, the risks associated with international business operations, the
risks associated with governance and control matters, whether the option to
acquire the remainder of the Alliance Boots equity interest will be exercised
and the financial ramifications thereof, the risks associated with potential
equity investments in AmerisourceBergen including whether the warrants to
invest in AmerisourceBergen will be exercised and the financial ramifications
thereof, changes in vendor, payer and customer relationships and terms,
changes in network participation, levels of business with Express Scripts
customers, the implementation, operation and growth of our customer loyalty
program, changes in economic and market conditions, competition, risks
associated with new business areas and activities, risks associated with
acquisitions, joint ventures and strategic investments, the ability to realize
anticipated results from capital expenditures and cost reduction initiatives,
outcomes of legal and regulatory matters, and changes in legislation or
regulations. These and other risks, assumptions and uncertainties are
described in Item 1A (Risk Factors) of Walgreen Co.’s most recent Annual
Report on Form 10-K, which is incorporated herein by reference, and in other
documents that Walgreens file or furnish with the Securities and Exchange
Commission. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those indicated or anticipated by such forward-looking
statements. Accordingly, you are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date they are
made. Except to the extent required by law, Walgreens does not undertake, and
expressly disclaims, any duty or obligation to update publicly any
forward-looking statement after the initial distribution of this release,
whether as a result of new information, future events, changes in assumptions
or otherwise.

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Contact:

Investor Relations:
Walgreens
Rick Hans / Ashish Kohli
+1 847-315-2385 / +1 847-315-3810
or
Alliance Boots
Gerald Gradwell
+44 (0)207-980-8527 (UK)
+1 646-688-1336 (US)
or
Media Relations:
Walgreens
Michael Polzin
+1 847-372-3502
or
Alliance Boots
Yves Romestan / Laura Vergani / Katie Johnson
+44 (0)207-980-8585
or
Brunswick Group
Steve Lipin / Radina Russell
+1 212-333-3810