SCHEDULE 13D/A: Walgreens Boots Alliance Reduces Cencora Stake Below 5% Following Forward Sale Contract Settlements

Walgreens Boots Alliance Holdings LLC has settled portions of its May 2023 variable pre-paid forward sale contracts, resulting in its beneficial ownership of Cencora, Inc. common stock falling below the 5% threshold.

Summary

• Walgreens Boots Alliance Holdings LLC (WBA Holdings), along with its parent companies WBA Investments, Inc. and Walgreens Boots Alliance, Inc. (collectively, the "Reporting Persons"), has filed Amendment No. 22 to its Schedule 13D regarding its stake in Cencora, Inc.
• The amendment reports the settlement of portions of four variable pre-paid forward sale contracts (May 2023 Transactions) entered into on May 11, 2023, with Bank of America, N.A., JPMorgan Chase Bank, National Association, Mizuho Markets Americas LLC, and Wells Fargo Bank, National Association.
• These May 2023 Transactions initially obligated WBA Holdings to deliver up to 4,590,000 shares of Common Stock and entitled WBA Holdings to potentially receive additional cash payments.
• In exchange for these obligations, WBA Holdings received approximately $644.3 million in aggregate cash payments around the time of entering the May 2023 Transactions.
• WBA Holdings also pledged 4,590,000 shares of Common Stock to secure its obligations under these contracts.
• The settled portions of the May 2023 Transactions matured over five valuation dates from June 2, 2025, to June 6, 2025.
• As a result of these settlements, WBA Holdings delivered an aggregate of 765,000 shares of Common Stock to the financial institutions.
• WBA Holdings received an aggregate of approximately $34.0 million from the VPF Financial Institutions in respect of these valuation dates.
• Following these settlements, WBA's beneficial ownership of Cencora's outstanding Common Stock has fallen to 4.96%, representing 9,615,000 shares, based on 193,823,487 shares outstanding as of April 30, 2025.
• Due to the beneficial ownership falling below 5%, the Reporting Persons will not make further amendments to this Schedule 13D regarding the ongoing settlement of the May 2023 Transactions.
• All existing commercial agreements between WBA and Cencora, including the US pharmaceutical distribution agreement, remain in full force and effect.

Sentiment

Score: 4

Explanation: The sentiment is neutral to slightly negative for Cencora as a major shareholder has reduced its stake, indicating a divestment strategy. However, the transaction was part of a pre-existing financial arrangement, and commercial agreements between the two entities remain in place, mitigating a strong negative signal.

Positives

• WBA Holdings received approximately $34.0 million in cash from the VPF Financial Institutions upon settlement of the forward sale contracts.
• Existing commercial agreements between Walgreens Boots Alliance and Cencora, including the US pharmaceutical distribution agreement, remain fully intact and in force.

Negatives

• Walgreens Boots Alliance's beneficial ownership in Cencora, Inc. has decreased significantly, falling below the 5% threshold to 4.96%.

Risks

• The document does not explicitly state new risks for Cencora or WBA. The reduction in WBA's stake is a result of previously disclosed financial contracts.

Future Outlook

Walgreens Boots Alliance's beneficial ownership in Cencora, Inc. has fallen below 5% due to the settlement of variable pre-paid forward sale contracts. While the overall settlement of the May 2023 Transactions is ongoing, no further Schedule 13D amendments will be filed by the Reporting Persons specifically for these settlements as their beneficial ownership is now below the reporting threshold. Importantly, all existing commercial agreements between WBA and Cencora, including the US pharmaceutical distribution agreement, remain in full force and effect.

Management Comments

• Todd Heckman, President of Walgreens Boots Alliance Holdings LLC and WBA Investments, Inc., signed the filing.
• Manmohan Mahajan, Executive Vice President and Global Chief Financial Officer of Walgreens Boots Alliance, Inc., signed the filing.

Industry Context

This filing reflects a continued strategic divestment by Walgreens Boots Alliance of its stake in Cencora, a major pharmaceutical distributor. This move allows WBA to monetize its investment while maintaining its commercial relationship through existing agreements. Such divestments can be part of a larger corporate strategy to optimize capital allocation or focus on core businesses, common in the dynamic healthcare and pharmacy sectors.

Related Party Transactions

• The settlement of variable pre-paid forward sale contracts between WBA Holdings and various financial institutions, which involved the delivery of Cencora shares and cash payments, represents a significant financial transaction related to WBA's investment in Cencora.

Stakeholder Impact

• Shareholders of Cencora, Inc. will observe a reduction in the ownership stake held by Walgreens Boots Alliance, a significant institutional investor, which could influence market perception.
• Shareholders of Walgreens Boots Alliance will see the monetization of a portion of their investment in Cencora, potentially freeing up capital for other strategic initiatives.

Next Steps

• No further amendments to this Schedule 13D will be made by the Reporting Persons regarding the ongoing settlement of the May 2023 Transactions, as their beneficial ownership has fallen below 5%.

Key Dates

Keywords

Cencora, Walgreens Boots Alliance, Schedule 13D, Beneficial Ownership, Stock Sale, Forward Sale Contracts, Divestment, Pharmaceutical Distribution, Healthcare Investment