FoxMeyer's Healthcare Distribution Business To Be Sold To McKesson; Agreement Provides FoxMeyer
with Capacity to Purchase Up to $100 Million in Additional Inventory
DALLAS, TX--Oct. 4, 1996--FoxMeyer Drug Company today announced that it and its affiliated
companies engaged in the healthcare distribution business have reached an agreement to sell substantially
all of their assets to McKesson Corporation (NYSE:MCK), a provider of health care products and
services throughout the U.S. and Canada.
McKesson will pay $80 million in cash subject to certain adjustments relating to future financial targets
and the sellers' reaching agreements with certain trade vendors relating to chargeback claims. The
agreement is subject to the satisfaction of certain conditions, including the expiration of waiting periods
under the Hart-Scott-Rodino Act, approval of the agreement by the Bankruptcy Court pursuant to section
363 of the Bankruptcy Code, obtaining agreements from vendors relating to their honoring a certain level
of post-petition chargeback claims and FoxMeyer's satisfaction of certain targets for sales, financial
performance and accounts receivables collections. In addition, McKesson has agreed to discharge
FoxMeyer's obligations under its debtor-in-possession financing package with GE Capital Services and
to assume substantially all other liabilities of the Company other than pre- petition trade debt.
As part of the agreement, McKesson will provide $30 million to FoxMeyer through a participation in the
Company's existing debtor-in- possession financing with GE Capital Services. These funds will provide
further borrowing availability under that agreement and will facilitate the purchase of approximately $100
million of additional inventory.
FoxMeyer Drug Company and its affiliates are wholly-owned subsidiaries of FoxMeyer Health
Corporation (NYSE:FOX). After the consummation of the proposed sale, FoxMeyer Health will have no
further involvement in the healthcare distribution business, which FoxMeyer Health has treated, for
accounting purposes, as a discontinued operation since its June 30, 1996, quarterly financial statements.
Robert A. Peiser, vice chairman and chief executive officer of FoxMeyer Drug, said "By agreeing to the
sale to McKesson, we have endeavored to achieve the best possible resolution for all of our
constituencies consistent with our obligation to maximize creditors' recoveries. We believe that the sale
to McKesson is the best alternative available to us to achieve these goals."
Mr. Peiser added, "Pending completion of the sale, the agreement with McKesson will put us in an even
stronger position to satisfy our obligations to customers -- including the timely supply of healthcare
products -- and, in doing so, to provide the highest levels of customer service.
"At the same time, we are very sensitive about the future welfare of our employees. A major
consideration in reaching this agreement was that we would be able to preserve as many jobs as possible.
While decisions regarding employment after the sale is completed will be up to McKesson, we have been
assured that they will give fair consideration to all our employees."
The agreement will be filed with the Bankruptcy Court in Wilmington, Del. today. Under the Bankruptcy
Code, the agreement is subject to an open-bidding process. As a result, it is possible that other bidders
may come forward offering to purchase the same or other assets. The proceeds from the sale transaction
will be used to discharge liabilities and satisfy creditors' claims in the Chapter 11 cases of FoxMeyer
Drug and certain of its affiliated companies.
Mr. Peiser said that FoxMeyer Drug will continue to operate its warehouses and distribution facilities,
sales and administrative offices until the sale is completed, which is expected to occur sometime in
FoxMeyer Drug and certain affiliated companies filed to reorganize under Chapter 11 of the Bankruptcy
Code on August 27, 1996, in U.S. Bankruptcy Court in Wilmington, Del. FoxMeyer Drug is the nation's
fourth largest wholesaler of pharmaceutical products, health and beauty aids. The Company, which is
headquartered in Dallas, employs approximately 2,200 people in 21 states and the District of Columbia.
CONTACT: Sitrick And Company Sandra Sternberg/Ann Julsen, 310/788-2850
McKesson Corp. to Acquire Assets of FoxMeyer Corp.
SAN FRANCISCO, CA--Oct. 4, 1996--McKesson Corp. (NYSE:MCK) today announced that it has
executed a definitive agreement to acquire substantially all of the assets of the healthcare distribution
business of FoxMeyer Corporation. The agreement, which provides for purchase through an expedited
auction process, will be submitted today to the United States Bankruptcy Court in Delaware. Since its
bankruptcy filing on August 27, 1996, FoxMeyer has been operating as a debtor in possession under the
protection of Chapter 11 of the Bankruptcy Act.
McKesson will pay up to $80 million in cash, subject to certain adjustments, and will discharge
FoxMeyer's obligations under its debtor-in-possession financing with G.E. Capital Corporation. After
restoration of normal trade credit terms, McKesson's total investment in the business will be
approximately $400 million.
On approval of certain provisions of the agreement by the bankruptcy court, McKesson will provide $30
million to FoxMeyer through participation in its existing debtor-in-possession financing. These funds will
provide further borrowing availability and will facilitate the purchase of approximately $100 million of
additional inventory. The increased inventory will help to restore FoxMeyer's customer service levels.
Alan Seelenfreund, McKesson's chairman and chief executive officer, said, "FoxMeyer's respected sales
force has created a large and impressive customer base. Our plan is to use McKesson's considerable
financial and technology strength to provide customers with the quality service and uninterrupted product
flow critical to the success of their businesses."
"The acquisition of FoxMeyer clearly furthers our business strategy," said Mark A. Pulido, president and
chief operating officer. "McKesson has made significant investments in strategic initiatives to advance the
success of our customers. With this acquisition, these investments can be leveraged by quickly rolling out
our programs to FoxMeyer's broad base of retail and institutional customers."
"This transaction will also allow McKesson to make significant improvements in its cost structure.
Through the integration of these companies, we believe we can reduce annual fixed costs by more than
$80 million, achieving an operating expense ratio of 3% by the year 2000," said Pulido.
"Depending on the speed of integration of our operating units, we expect this transaction to be accretive to
earnings within 90 to 180 days following the closing. Given McKesson's strong balance sheet and
positive operating cash flows, this acquisition can be financed well within McKesson's targeted debt to
capital ratio and will not affect the company's ability to pursue additional acquisitions or share
repurchases," said Richard H. Hawkins, vice president and chief financial officer.
McKesson's newest retail offerings, CareMax(SM) and OmniLink(SM), give community pharmacists a
patient-centered network and the on-line connectivity necessary to compete in today's managed care
environment. In May, McKesson launched its newest retail offering, OmniLink(SM) Financial Systems,
which offers automated reconciliation and reporting services as well as pre-funding services for
In addition, this acquisition should substantially strengthen McKesson's position in the hospital
marketplace. FoxMeyer's institutional customers will have access to McKesson Health Systems'
offerings, including Automated Healthcare Inc.'s RxOBOT(TM), a hospital-based automated
comprehensive pharmaceutical cost management system.
"We are sensitive to the needs of FoxMeyer's customers and employees. We intend to keep the entire
FoxMeyer sales organization and are still evaluating our needs with respect to other employee groups. To
retain continuity of the workforce and minimize the inconvenience to customers, a `stay-pay' incentive
plan has been put in place," said Pulido.
In addition to the approval of the bankruptcy court, the transaction is subject to various contractual
conditions and to expiration of waiting periods under the Hart-Scott-Rodino Act. Assuming an expedited
timetable in the bankruptcy proceeding and regulatory approval, the company anticipates the transaction
closing sometime in November.
McKesson Corp., with annual revenues of $14 billion, is a leading provider of pharmaceuticals and
health care products and services. Through McKesson Drug Co., McKesson Health Systems and a
Canadian subsidiary, Medis Health and Pharmaceutical Services, the company is North America's largest
pharmaceutical and health care products distributor.
FoxMeyer Corporation and its affiliates, based in Carrollton, TX, is a distributor of pharmaceuticals,
health and beauty aids and other products, and a franchiser and operator of retail stores. It had sales of
$5.5 billion in fiscal year ended March 31, 1996.
Except for the historical information contained herein, the matters discussed in this release are
forward-looking statements that involve risks and uncertainties that could cause actual results to differ
materially from those projected. These include the speed of integration of the acquired business as well
as other risks detailed from time to time in the Company's SEC reports. The Company assumes no
obligation to update the information in this release.
-0- Note to Editors: McKesson news releases are available at no charge through McKesson's
NewsOnDemand fax service. To immediately receive an index of available releases, call
1-800-344-6495 and press 2. On the Internet, visit us on the World Wide Web at:
CONTACT: Janet Bley (415) 983-9357
Vitro's Anchor Glass Subsidiary Completes Definitive Sale Agreement with Ball-Foster; Anchor Seeks
Bankruptcy Court Approval of Sale; Names James Malone Acting President Anchor Files For Injunction
To Prevent Owens-Brockway Glass Interference With Company's Sale
GARZA GARCIA, N.L., Mexico--Oct. 4, 1996-- Sociedad Anonima (BMV: VITRO; NYSE: VTO)
announced today that its indirect wholly-owned subsidiary, Anchor Glass Container Corporation, has
completed a definitive agreement to sell the company's assets to the Ball-Foster Glass Container
Company, L.L.C. for $365 million in cash (subject to adjustment) and the assumption of certain liabilities.
In order to facilitate the transaction, Vitro, SA has also entered into an agreement with Ball-Foster
relating to the sale of Anchor's assets. The transaction is subject to certain conditions, including the
approval of the Bankruptcy Court and regulatory approvals and is scheduled to close by the end of 1996.
Anchor Glass announced on September 13 that it had signed a letter of intent to sell the assets of the
Company to Ball-Foster. The Company also announced that it filed for protection under Chapter 11 of the
United States Bankruptcy Code in order to ensure its continued operations through the closing of the sale.
Anchor has filed with the Bankruptcy Court motions seeking approval of the sale of substantially all of its
assets under Section 363 of the Bankruptcy Code, and seeking a hearing on procedures for higher and
Additionally, Anchor said that Alfonso Gomez Palacio has stepped down as president and chief executive
officer, and has named Anchor's Chairman, James Malone, acting president, effective immediately. Mr.
Gomez Palacio will return to Mexico as president of Vitro Envases, Vitro's glass container business.
Finally, Anchor said that it has filed a complaint with the Bankruptcy Court seeking an injunction against
the prosecution of a complaint filed by Owens-Brockway Glass Container Inc. Owens- Brockway's
complaint was filed against Ball-Foster Container Co., L.L.C. in state court in Ohio on September 17,
1996. Owens- Brockway's complaint seeks damages and an injunction preventing Ball- Foster from
purchasing assets that allegedly embody trade secrets and proprietary information provided to Anchor by
Owens-Brockway, and from alleged tortious interference with their contractual rights through
Ball-Foster's purchase of Anchor's business.
Vitro, S.A. produces glass containers, flat glass, automotive glass, glassware, plastic containers,
aluminum cans and household appliances for commercial, industrial and consumer use. Vitro supplies
numerous industries, including food and beverage construction and automotive. Based in Monterrey,
Mexico, and founded in 1909, Vitro has strategic alliances with a dozen large corporation around the
world. Vitro operates in seven countries, including Mexico and the United States, and exports products to
more than 60 countries worldwide.
CONTACT: Vitro, Sociedad Anonima Ulrich Sander (media), 011-528-329-1332 or Vitro, Sociedad
Anonima Hugo Jaime Garcia (financial community), 011-528-329-1210 or Ruder Finn, Inc. Robert D.
Ferris (U.S. contact), 212-715-1573