Walgreen Co. -- Moody's says Alliance Boots purchase of Farmacias Ahumada pressures Walgreen's debt reduction plan

New York, May 06, 2014 -- Moody's Investors Service today stated that it views as a credit negative development Alliance Boots GmbH (unrated) intention to acquire Farmacias Ahumada S.A. (unrated) ("FASA") for an equity consideration of $8.3 billion Mexican Peso (about $640 million). This acquisition will give Alliance Boots a sizable retail drug store presence in both Mexico and Chile. Moody's anticipates that this acquisition will be largely debt financed, likely increasing Alliance Boots debt levels when Walgreen Company (Baa1 stable) acquires the remaining 55% stake in 2015. This places some pressure on Walgreen's ability to meet its net $11 billion debt target by the 2016 fiscal year end.

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