DRUG WHOLESALERS: Mergers Nixed In Wake Of Ruling
The merger plans between Cardinal Health Inc. and Bergen Brunswig Corp., and between McKesson Corp. and AmeriSource Health Corp. were formally scuttled by the companies Friday, confirming predictions that a federal judge's ruling to block the deals last week would prove fatal for the deals. Expressing a desire "to move on," the four companies said "it wasn't worth the time and money to appeal the ruling, a bid they said would be hard to win" (Berner, Wall Street Journal, 8/10).
Despite the ruling, the companies reaffirmed their intentions to continue expansions. The Columbus Dispatch reports that Cardinal will focus on "new opportunities," according to chair and CEO Robert Walter. First and foremost is the "recently announced merger with R.P. Sherer, a Michigan-based developer of pharmaceutical-delivery systems" (8/8). Bergen also plans to purchase in the near future "smaller, ancillary companies -- such as those in packaging and technology -- that could help Bergen lower costs," according to company CEO and President Donald Roden (Mulkern, Orange County Register, 8/8). John Ford, managing director of Bear Stearns & Co., contended that the companies' financial outlook is rosy, despite the mergers' failures. "It would have been a positive thing for them if the deals had gone through, but it's not a negative that it didn't," he said (AP/Los Angeles Time, 8/8).