Bergen and Cardinal May Go to Court for Merger OK
Drug wholesalers Bergen Brunswig Corp. and Cardinal Health Inc. said Wednesday they are considering whether to go to court to win approval for their proposed merger.
The companies issued the statements a day after the Federal Trade Commission decided to challenge Cardinal’s proposed acquisition of Orange-based Bergen and McKesson Corp.’s plans to purchase AmeriSource Health Corp. Together, the two combinations were valued at more than $5 billion when announced last year.
“We will be studying this issue carefully before deciding whether we wish to divert from our business the amount of time, effort and expense that would be required to pursue litigation with the government,” said Donald R. Roden, president and chief executive officer of Orange-based Bergen Brunswig.
Cardinal said it would “fully evaluate all of its options” in the case. McKesson and AmeriSource haven’t commented.
Bergen shares fell $2.56 to $40.13 in trading on the New York Stock Exchange. Options to buy Bergen plunged. The most actively traded of those securities--a “call” option that gives owners the right to buy shares of Bergen at $45 on March 21--plunged $1.81 to 50 cents.
Shares of the other three companies in the deals rose Wednesday, bouncing back from losses early in the session. Cardinal, based in Dublin, Ohio, rose 81 cents to $79.81. San Francisco-based McKesson was up 75 cents to $54, and AmeriSource, based in Valley Forge, Pa., rose 94 cents to $57.69.
The commissioners voted 3 to 1 to challenge the combinations in court. The FTC said the plan would lead to higher prices for prescription drugs and less timely service to hospitals, nursing homes and drugstores.
Both Cardinal and Bergen disputed that assertion. Robert D. Walter, Cardinal’s chairman and chief executive officer, said the marriage with Bergen “is pro-competitive and would both lower prices and increase services to our customers.”
If the companies choose to fight, they could face court proceedings lasting months or even years. The FTC plans to ask a federal trial judge to block the transactions temporarily until an FTC administrative law judge can hold a full-scale trial on the proposals.
