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McKesson Corporation to Acquire McQueary Brothers Drug Company

Business Wire, April 8, 2008

Regional Pharmaceutical Distributor Extends Independent Pharmacy Segment Footprint; McQueary Brothers' Customers Will Gain Business and Patient Care Offerings

SAN FRANCISCO -- McKesson Corporation (NYSE:MCK) today announced that it has signed a definitive agreement to purchase McQueary Brothers Drug Company, a Springfield, Missouri-based regional distributor of pharmaceutical, health, and beauty products to more than 400 independent and regional chain pharmacies in Missouri, Arkansas, Illinois, Kansas, Oklahoma, Nebraska and Iowa. The acquisition expands McKesson's distribution footprint in the Midwestern U.S. and continues its momentum in the independent pharmacy segment. The purchase price is approximately $190 million.

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The acquisition is expected to close in the second calendar quarter of 2008, subject to customary closing conditions, including regulatory review. After the closing, McQueary Brothers will be integrated into McKesson's U.S. Pharmaceutical business, which is reported in the McKesson Distribution Solutions segment. The acquisition will have no significant impact on McKesson's FY09 earnings and will be modestly accretive to FY10 earnings per fully diluted share.

"The anticipated addition of McQueary Brothers, a private, family-owned company that has been serving independent pharmacy for more than 80 years, reinforces McKesson's ongoing commitment to the independent segment," said Paul Julian, McKesson Executive Vice President and Group President. "Based on McKesson's 175 year history of helping independent pharmacies manage and grow their businesses while improving their delivery of patient care, McQueary Brothers is a natural fit for McKesson."

McKesson connects independent pharmacies to a broad suite of programs and services designed to help them manage and grow their businesses. Today, McKesson's fast-growing Health Mart[R] franchise helps independent pharmacies compete locally and nationally by delivering managed care contracting services, marketing and advertising tools, in-store programs, and operational support. McKesson also offers a competitive generics purchasing program (McKesson OneStop Generics[R]), automation and pharmacy management systems, medication therapy management programs and front-end merchandising. Additionally, as a leading provider of connectivity solutions, McKesson helps connect payors, manufacturers, consumers, and other key healthcare players together in reimbursement and other patient care services.

"As the country's oldest and largest pharmaceutical wholesaler, McKesson is committed to supporting the expanding needs of independent pharmacy in America, and securing their place in the healthcare system," said John Figueroa, President, McKesson U.S. Pharmaceutical. "The combination of McKesson and McQueary Brothers will allow McKesson to offer our broad portfolio of products and services to hundreds more independent pharmacies in the Midwestern United States."

About McQueary Brothers

McQueary Brothers Drug Company, based in Springfield, Missouri, is a regional distributor of pharmaceutical, health, and beauty products to more than 400 independent and regional chain pharmacies in Missouri, Arkansas, Illinois, Kansas, Oklahoma, Nebraska and Iowa. Founded by brothers Les and Fred McQueary in 1924, the company is now in its 4th generation of family ownership.

About McKesson

McKesson Corporation, currently ranked 18th on the FORTUNE 500, is a healthcare services and information technology company dedicated to helping its customers deliver high-quality healthcare by reducing costs, streamlining processes, and improving the quality and safety of patient care. McKesson is the longest-operating company in healthcare today and in 2008 is marking 175 years of continuous operations. Over the course of its history, McKesson has grown by providing pharmaceutical and medical-surgical supply management across the spectrum of care; healthcare information technology for hospitals, physicians, homecare and payors; hospital and retail pharmacy automation; and services for manufacturers and payors designed to improve outcomes for patients. For more information, visit us at www.mckesson.com.

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McKesson Corporation to Acquire McQueary Brothers Drug Company

Business Wire, April 8, 2008

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