Orange, Calif. Drug distributor Bergen Brunswig tapped into the long-term health care market with the acquisition of PharMerica Inc., a stock-swap deal with an estimated value of $1.4 billion.

"This transaction builds on our. . . acquisition of Stadtlander [a specialty pharmacy company] by leveraging our core competencies into the rapidly expanding long-term care and alternate site markets," said Donald Roden, Bergen president and chief executive. Bergen bought Toronto-based Stadtlander, a $400 million specialty pharmacy targeting high-risk, high-cost patients with chronic diseases, in November. (Stadtlander was a subsidiary of Houston-based Counsel Corp., a health care company that owns 27 percent of American HomePatient.)

In a teleconference call January 11, Bergen executives said the deal with Tampa, Fla.-based PharMerica, which provides drugs to about 500,000 patients in nursing homes and long-term care facilities, should benefit its network of independent retail pharmacists-a group that objected to the company's failed merger with Cardinal Health in 1997. Officials said the company expects to send some business to retail pharmacists to provide services to nursing home patients in rural areas that PharMerica cannot serve.

Although the National Community Pharmacy Association hasn't issued a formal statement on the merger, Todd Dankmyer, senior vice president of communications, said the association has general concerns about vertical integration of the pharmacy industry, including mergers like this one.

"Generally speaking, those kind of mergers don't work to the advantage of independent pharmacies," Dankmyer said. "We haven't specifically researched the PharMerica/Bergen merger, so it's premature to make a statement, but I think PharMerica is seen as a competitor to some independents. The fact that Bergen would be purchasing a company that is competing with independent pharmacies and the fact that independent pharmacies are the largest part of Bergen's business are of some concern."

Under the deal, Bergen will give PharMerica shareholders 0.275 share of Bergen common stock for each share of PharMerica common stock. Bergen also will assume about $580 million of PharMerica's long-term debt.

On completion of the merger, which is subject to approval by shareholders of both companies, PharMerica shareholders will own about 18 percent of the combined corporation. Charles Carpenter, Bergen's chief procurement officer, will become president of PharMerica and C. Arnold Renshler, current CEO of PharMerica, will be nominated to the board of directors, Bergen officials said.

In November, PharMerica said it was looking for a buyer after it posted a third-quarter net loss of $127.4 million, or $1.42 per share. The date coincides with Bergen's November purchase of Stadtlander, in which it obtained the option to purchase, or the right to vote, all of Counsel's shares of PharMerica Inc., representing about 9 percent of PharMerica's outstanding shares.

After the January 11 merger announcement, Bergen shares dropped $5 to $27.50 on the New York Stock Exchange.