| Item 7.01. |
Regulation FD Disclosure. |
On November 23, 2023, with financial support from Walgreens Boots Alliance, Inc. and its subsidiaries (the “Company”), Boots Pensions Limited, (“Trustee”), in its capacity as trustee of the UK Boots Pension Plan (“Plan”), entered into a Bulk Purchase Annuity Agreement (“BPA”) with Legal & General Assurance Society Limited (“Legal & General”) to insure the benefits of all 53,000 of its members in an insurance transaction valued at £4.8 billion ($6.0 billion).
The BPA also contemplates a future potential conversion of the BPA, which is expected to be around two years, into a buy-out where Legal & General will take over full responsibility to directly provide pensions or other benefits to the Plan members (the “Buy-Out”), at which time the Plan can be wound-up.
The transaction is being funded through existing Plan assets, as well as incremental contributions by the Company to the Plan. The Company will accelerate approximately £170 million ($210 million) of already committed contributions to the Plan and has committed to make an additional pre-tax contribution to the Plan, which is expected to be approximately £500 million ($630 million). The previous guarantee from the Company to the Plan has been terminated and replaced with a smaller, temporary guarantee (the “New Guarantee”). The New Guarantee will decrease in line with the settlement of the aforementioned commitments and eventually terminate upon satisfaction of such commitments. By irrevocably transferring the future benefit obligations and annuity administration to Legal & General following the expected Buy-Out, the Company expects to fully eliminate the Company’s Plan obligations and to record a related non-cash settlement charge.
A copy of the press release announcing the transaction is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Item 7.01, including the exhibits attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. This information shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference to such disclosure in this Current Report on Form 8-K in such a filing.
Cautionary Note Regarding Forward-Looking Statements
All statements in this report that are not historical including, without limitation, those regarding future commitments and expected timelines, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “expect,” “will,” “likely,” “intend,” “plan,” “aim,” “continue,” “believe,” “seek,” “anticipate,” “upcoming,” “may,” “possible,” and variations of such words and similar expressions are intended to identify such forward-looking statements.
These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions, known or unknown, that could cause actual results to vary materially from those indicated or anticipated. These risks, assumptions and uncertainties include those described in Item 1A (Risk Factors) of our Annual Report on Form 10-K for the fiscal year ended August 31, 2023 and in other documents that we file or furnish with the Securities and Exchange Commission. If one or more of these risks or uncertainties materializes, or if underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. All forward-looking statements we make or that are made on our behalf are qualified by these cautionary statements. Accordingly, you should not place undue reliance on these forward-looking statements, which speak only as of the date they are made.
We do not undertake, and expressly disclaim, any duty or obligation to update publicly any forward-looking statement after the date of this release, whether as a result of new information, future events, changes in assumptions or otherwise.