Durr-Fillauer Medical Takeover Completed by Bergen Brunswig

Ending a battle that lasted all summer, Bergen Brunswig Corp. on Monday finally completed its $470-million takeover of an Alabama competitor after the two companies convinced authorities that the deal would not violate antitrust laws.

Durr-Fillauer Medical Inc. had initially fended off Bergen Brunswig’s advances by asking attorneys general in Alabama, Louisiana and Florida to investigate the Orange-based drug wholesaler’s offer. But after Durr-Fillauer agreed earlier this month to drop a proposed $430-million, stock-swap merger with Ohio-based Cardinal Distribution Inc., it had to show authorities that a Bergen Brunswig merger would not hurt competition in the huge drug wholesale business.

Bergen Brunswig is the second-largest drug wholesaler in the nation, surpassed only by McKesson Corp. of South San Francisco. McKesson has yearly revenue of $7 billion, while Bergen Brunswig and Durr-Fillauer together have about $6 billion.

The antitrust investigation was the final hurdle after a series of maneuvers amid accusations that Bergen Brunswig in early July launched what amounted to a hostile takeover attempt. Bergen Brunswig had tried court action to thwart the Durr-Fillauer deal with Cardinal and had appealed to Durr-Fillauer’s directors in a series of letters and meetings. Not until Sept. 8, when Bergen Brunswig raised its offer from $26 a share to $33, did Durr-Fillauer acquiesce.

By Friday afternoon, all issues including the antitrust inquiry were cleared up, and the companies were given the go-ahead by attorneys general in the three Southern states where Durr-Fillauer has its biggest market.

“That has all been settled,” said Neil Dimick, Bergen Brunswig vice president. “There are no more contingencies.”

Dimick said that, as of Monday, Durr-Fillauer stockholders had tendered 11.5 million, or 95.7%, of Durr-Fillauer’s outstanding shares, making the acquisition possible without a stockholders’ vote. The deal is expected to be finalized by the end of the week, Dimick said. Durr-Fillauer will keep its name.

Bergen Brunswig had hoped to purchase Durr-Fillauer’s shares last week. Two conditions imposed by Bergen--a promise by Durr-Fillauer’s two largest customers that they would not defect and proposed no-compete clauses and employment contracts for Durr-Fillauer’s four top executives--had threatened to sink the agreement. Those conditions had been settled by early last week, but the antitrust investigation forced Bergen Brunswig to extend the deadline until Friday afternoon.

The company has established a revolving credit account with Continental Bank in Chicago to pay part of the all-cash purchase. The bank will provide about $175 million. The rest--about $295 million--will be paid by Bergen Brunswig from its cash reserve.

Bergen Brunswig’s stock closed Monday at $19.12 a share, down 25 cents, in trading on the American Stock Exchange. Durr-Fillauer, traded on the NASDAQ market, gained 12 cents to close at $32.75.