Larger Celesio Bid by McKesson (MCK) Would Create Uncertainty - Moody's

Moody's said on 13 January, McKesson Corporation (NYSE: MCK) (Baa2 on review for downgrade) announced that it did not meet the condition of its tender offer for drug wholesaler and retail pharmacy chain operator, Celesio AG (unrated), which required that it receive at least 75% of outstanding shares and convertible bonds of Celesio. At this time, it is unclear what McKesson's next steps will be. It appears that regulatory constraints will limit McKesson's ability to re-launch another tender offer. If the company decides that it will not or cannot pursue the Celesio transaction in its current form, it would eliminate a material negative credit event because the company would not be taking on significant amounts of additional debt and the risk of operating retail pharmacies in heavily-regulated European markets.

For additional information, please see Moody's Issuer Comment on McKesson on www.moodys.com.

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