Bergen Brunswig Agrees to Acquire PharMerica and Signs $1.4 Billion Definitive Merger Agreement.

ORANGE, Calif. and TAMPA, Fla.--(BW HealthWire)--Jan. 11, 1999--

Accretive Combination Builds On Bergen's Successful Logistics,

Purchasing and Information Technology Platforms

To Provide Patient-Driven Purchasing Leverage While Further

Penetrating The Continuum Of Care

Bergen Brunswig Corporation (NYSE: BBC), one of the nation's largest distributors of pharmaceuticals and medical-surgical supplies, and PharMerica, Inc. (NASDAQ: DOSE), one of the nation's largest providers of pharmaceutical products and pharmacy management services to long term care and alternate site settings, jointly announced today that they have entered into a definitive agreement to merge the two companies as part of an aggressive strategy to reduce healthcare costs through patient-driven, disease-specific pharmaceutical care.

Commenting on the announcement, Bergen's president and CEO, Donald R. Roden, said, "Our successful strategy of capitalizing on Bergen's core competencies in logistics, purchasing and information technology has delivered outstanding results for our shareowners. We are proud of our net earnings growth momentum, which has increased from 14% in FY95 to 22% in fiscal 1998. This transaction further accelerates our earnings growth and is expected to raise our EBITDA margins by over 40%.

"This transaction builds on our recent pending acquisition of Stadtlander by leveraging our core competencies into the rapidly expanding long-term care and alternate site markets. PharMerica brings to Bergen more than 500,000 patients served by 168 pharmacy locations, enabling us to expand our ability to provide disease-specific pharmaceutical care direct to the patient in the lower-cost long term and alternate site settings."

Under terms of the agreement, Bergen Brunswig will acquire 100% of the capital stock of PharMerica and give shareholders of PharMerica a fixed exchange ratio of 0.275 of a share of Bergen Brunswig common stock for each share of PharMerica common stock. Bergen Brunswig will issue approximately 25 million shares in the merger and will convert PharMerica stock options into Bergen Brunswig options at the exchange ratio. Bergen Brunswig is expected to assume approximately $580 million of PharMerica's long-term debt. Based upon the closing stock price of Bergen Brunswig on January 8, 1999, the implied value of the transaction would be approximately $1.4 billion. PharMerica has 89.7 million fully diluted shares outstanding and upon completion of the merger, PharMerica shareholders will own approximately 18% of the combined corporation on a fully diluted basis. The combination will be accounted for as a purchase and is expected to be tax-free to PharMerica shareowners. The transaction has been approved by both companies' boards of directors.

Commenting on the financial benefits of the transaction, Bergen's chief financial officer, Neil F. Dimick, said, "We expect this transaction to complement our recent financial success. It is expected to be non-dilutive to earnings in the remainder of fiscal 1999 and strongly accretive in fiscal 2000. In addition, we expect our gross and operating margins to expand with the inclusion of PharMerica 's higher margin, value-added services. Finally, we expect to maintain our high-investment grade credit rating as we continue to pursue our goal of maintaining a target net debt to total capitalization ratio of less than 50%."

Mr. Roden said, "It gives me great pleasure to announce that Charles J. Carpenter, Bergen's Chief Procurement Officer and a member of Bergen's Office of the President since 1996, will become president of PharMerica continuing to report directly to me. Chuck is especially well suited to lead the completion of the Capstone and PCA integration while expanding upon the effectiveness of their formulary standardization and volume purchasing programs. Capitalizing on Bergen's strength in financial and operating systems, Chuck will oversee the implementation of Bergen's controls on PharMerica.

"Chuck has been an integral part of Bergen's growth and operating efficiencies, playing a key role in the consolidation of over 100 drug distribution centers to the current 31. Streamlining logistics, gaining productivity through automation, and developing strong data-driven purchasing, contract and marketshare programs to include patient-driven purchasing efficiencies will create value for both Bergen, our customers and our suppliers.

"At closing, C. Arnold Renschler, chief executive officer of PharMerica, will be nominated to serve as a member of the board of directors and become an executive vice president of Bergen Brunswig, reporting directly to me. Dr. Renschler's experience as an operating executive and a clinician will be utilized to further develop Bergen's cross divisional capabilities in pharmaceutical patient care and innovative disease management initiatives. On an interim basis, he will work closely with Chuck Carpenter to create a smooth transition."

Dr. Renschler, said, "In an increasingly competitive healthcare environment, our merger with Bergen allows us to capitalize on our extensive formulary, clinical outcomes data and information systems competencies. In Bergen, we found a partner that shared our vision of improving patient care through efficient utilization of pharmacoeconomic research to lower overall healthcare costs."

Mr. Roden further explained, "We are particularly excited by the demographics of PharMerica's core customer base. First, the 65 and over segment of the population has been growing faster than the overall population (13% growth in the 90's compared to total U.S. population growth of 11%). Second, this growth is magnified in the 85 and over segment, which represents approximately 50% of long-term care occupants and has grown at 43% over the same time period.

"By leveraging our core competencies in pharmaceutical distribution into these new markets, we are now positioned to capture and analyze the data these patient populations produce, standardize product delivery and utilization and amplify substantially the value we deliver to both our manufacturer and payer customers -- ultimately enhancing our ability to reduce the costs of the healthcare system while delivering a strong value proposition to our customers."

The transaction, which is subject to approval by shareholders of both companies as well as receipt of certain regulatory approvals including expiration of the waiting period under the Hart-Scott-Rodino Anti-Trust Improvements Act, is expected to be completed during the second calendar quarter of 1999.

Bergen Brunswig Corporation, a Fortune 200 company with 1998 total net sales of $17.1 billion (including bulk shipments made to customers' warehouses), is one of the nation's leading supply channel management companies. In addition to its diversified healthcare product offerings, the company offers innovative logistics management programs in pharmaceuticals and medical-surgical supplies to all healthcare venues. These programs are designed to help customers grow efficiently, improve cost effectiveness, and further support their focus on patient/consumer care.

PharMerica Inc., with annualized net sales of $1.2 billion, is a leading provider of pharmaceutical products and services serving approximately 500,000 patients in long-term care and alternate site settings. The company provides its services to patients in skilled nursing facilities, assisted living facilities, residential and independent living communities, specialty hospitals and the home setting. PharMerica currently serves approximately 380,000 long term care residents and more than 106,000 workers' compensation patients via mail service and on-line pharmacy.

The non-historical information set forth in this press release (including the estimates regarding the non-dilutive and accretive impact of the transaction, the anticipated effect of the transaction on Bergen's margins, earnings and net debt to total capitalization ratio, and the estimated closing date of the transaction) constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995; and are subject to risks, uncertainties and other factors which could cause actual results to differ materially from those projected or implied. Estimates regarding the non-dilutive and then accretive impact of the transaction and the anticipated impact of the transaction on margins and earnings are subject to the risks affecting the businesses of both Bergen and PharMerica. The most significant of such uncertainties are described in exhibit 99(a) to Bergen 's Annual Report on Form 10-K for the year ended September 30, 1998, in PharMerica 's most recent Annual Report on Form 10-K and in other reports and exhibits filed by Bergen and PharMerica with the Securities and Exchange Commission. Estimates regarding capitalization ratios are impacted by conditions in the public and private debt and equity markets, the nature of alternatives available to Bergen, overall economic conditions and other risks referred to in Bergen's public reports. Expectations regarding the timing of the transaction are subject in part to the timing and substance of regulatory responses to various filings to be made in connection with this transaction.

Bergen Brunswig press releases are available at no charge through the company's Faxline. To receive a directory of available releases, call [phone] and follow the voice-prompt instructions. You may also view the companies' websites at www.bergenbrunswig.com and www.pharmerica.com.

CONFERENCE CALL NOTIFICATION

Investors and Analysts Call

Bergen Brunswig and PharMerica will hold a conference call at 2:00pm EST on Monday, January 11, 1999 to discuss the transaction. Investors and analysts wishing to participate may call [phone] to access the conference. The companies will make a replay available starting at approximately 4:00pm EST. The replay number can be obtained by calling the Bergen Brunswig Investor Relations Department at [phone].

Media Call

Bergen Brunswig and PharMerica will hold a conference call at 3:30pm EST on Monday, January 11, 1999 to discuss the transaction. Media wishing to participate may call [phone] to access the conference. The companies will make a replay available starting at approximately 5:30pm EST. The replay number can be obtained by calling the Bergen Brunswig Investor Relations Department at [phone]. -0-

Financial Highlights
(12 months ended 9/30/98,
excludes special charges)

                                    Bergen Brunswig    PharMerica

Revenue (excl. warehouse)           $13.7 billion      $1.1 billion
D,S,G & A expense                   $534.1 million     $348.3 million
  % of revenue                      3.89%              31.61%
EBITDA                              $253.6 million     $127.8 million
  % of revenue                      1.85%              11.60%
Operating income                    $216.1 million     $92.5 million
  % of revenue                      1.58%              8.40%
Net income                          $103.9 million     $51.4 million
  % of revenue                      .76%               4.66%
Cash & Equivalents                  $79 million        $35.9 million
Total Assets                        $3.0 billion       $1.1 billion
Long-term debt                      $464.8 million     $571.0 million
Shareholders equity                 $629.1 million     $427.0 million
Net debt/total capital              37%                54%
Avg. fully diluted
    shares outstanding              102.6 million      89.7 million
Market capitalization               $3.3 billion       $581.0 million
    (as of 1/8/99)



Fact Sheet

                          Bergen Brunswig    PharMerica

Headquarters              Orange, CA         Tampa, FL

Employees                 5,400              8,000
Trading symbol            NYSE: BBC          NASDAQ:  DOSE

Year Founded              1888               Dec., 1997 with the
                                             merger of Pharmacy
                                             Corporation of America
                                             and Capstone Pharmacy
                                             Inc.
Facilities

                          Distribution Centers   Pharmacies
                          Drug        31         168
                          Specialty   7*
                          Med-surg    32

Beds served:
 Long-Term Care &
  Assisted Living         NA                 380,000
 Home Delivery & Other    NA                 110,000

Fiscal Year End           September 30       December 31

Specialty Areas/a:        Oncology           Geriatric:
                          Nephrology         Alzheimers
                          Vaccine            Diabetes
                          Plasma             Stroke
                          Infertility        Osteoporosis
                          HIV / AIDS         Wound Care
                          Transplantation    Respiratory Therapy
                          Mental Health      Workers' Compensation
                          Corrections        Catastrophically Injured

(a) includes pending merger of Stadtlander Drug Company

Biography

Charles J. Carpenter

Charles J. (Chuck) Carpenter, 49, is executive vice president and chief procurement officer for Bergen Brunswig Corporation and a member of the Company's Office of the President. Mr. Carpenter is charged with consolidating all operations; product procurement and contracts for pharmaceutical and medical products; packaging and automation.

Formerly executive vice president of the Company's Northeast Region, Mr. Carpenter has been active in the healthcare community since 1970 and has served in a variety of management roles since joining Bergen Brunswig in 1981. In 1996, he launched the Company's Generic Purchasing Program (GPP) and Automated Compliance Assurance programs.

Mr. Carpenter is a graduate of National University in Sacramento, California, where he earned a bachelor's degree cum laude in business administration.

Married and the father of two children, he enjoys hobbies including golf, racquetball, basketball, fishing and music.