Bergen Brunswig Corp. of Orange said Thursday it is exploring the possible acquisition of FoxMeyer Corp., one of its biggest competitors in the drug distribution business. The move would make Bergen nearly the size of McKesson Corp. of San Francisco, the nation's largest drug wholesaler.
Dallas-based FoxMeyer is the No. 3 pharmaceutical wholesaler. Bergen, the second-largest, with the acquisition would boost its pharmaceutical sales from $3.9 billion to $6.3 billion annually. It would also strengthen Bergen's presence in the Midwest.
Analysts cautioned, however, that a merger between the two large distributors would likely receive careful scrutiny by federal antitrust regulators.
Bergen officials said the company earlier this week sent a letter to National Intergroup Inc. of Pittsburgh, FoxMeyer's parent firm, expressing interest in the acquisition. The letter was in response to a request from investment bankers for National Intergroup Inc.
Bergen officials stressed that the letter was not an offer to buy. Robert E. Martini, Bergen's president and chief executive, said his company hopes "to engage in serious discussions with FoxMeyer, and to make a thorough due diligence investigation so that we can make a meaningful offer." He said there is "no assurance" that an offer would be made.
Similarly, National Intergroup said it has not decided whether to sell FoxMeyer, but is testing the waters to see what price it might fetch.
Stan Ellspermann, National Intergroup's vice president of administration, said the company announced in August that it would entertain offers. "Bergen is one of several companies who have expressed an interest and we will see what develops," he said.
FoxMeyer distributes pharmaceutical products in about 30 states, concentrating in the Midwest, a region in which Bergen is comparatively weak, said Bob King, FoxMeyer's chief executive.