Under New CEO Wentworth, Walgreens Continues To Sell Off Distributor Stake

Walgreens Boots Alliance has sold more shares of drug distributor Cencora, formerly AmerisourceBergen, for proceeds of $674 million, which will be used for “debt paydown and general corporate purposes.”

The stock sale, which comes less than a month after former Express Scripts top executive Tim Wentworth became chief executive officer of Walgreens, brings the drugstore chain’s stake in Cencora down to 15% though Walgreens remains the drug distributor’s largest shareholder.

“The transaction is another decisive action to further simplify the company’s portfolio, while improving cash management,” Walgreens said Friday in a statement.

Walgreens began reducing its stake in the distributor and other businesses in the last two years under former chief executive Roz Brewer to raise money for other priorities such as its multi-billion dollar bet on doctor-staffed primary care clinics attached to drugstores.

In May, Walgreens sold shares of Cencora, then known as AmerisourceBergen, for proceeds of $694 million. That transaction followed another sale of the distributor’s stock last December for proceeds of $1 billion, reducing its stake in the company to less than 20%.

The divestiture strategy continues under Wentworth even as he builds his new executive team. Walgreens earlier this month named Neal Sample as its new Executive Vice President and Chief Information Officer even as the company this week continued to pare its headcount at company headquarters, eliminating more than 260 corporate jobs.

Sample’s experience includes stints as chief information officer at Northwestern Mutual and Express Scripts where he was chief operating officer and CIO when Wentworth was the pharmacy benefit manager’s CEO. Wentworth and Sample led Express Scripts through its $54 billion acquisition by health insurance giant Cigna in 2018.

Walgreens has been spending billions of dollars to expand its primary care business and has used a mix of equity and debt to do so. Most notably, Walgreens has invested in VillageMD, which last year announced plans to buy Summit Health for $8.9 billion to expand doctor-staffed clinics across the country. That transaction included investments from Walgreens, which already owns about half of VillageMD, and Cigna’s health services business Evernorth.

Walgreens and rivals CVS Health, Walmart and Amazon are pushing deeper into providing medical care in drugstores and other retail settings.