PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JUNE 18, 1997)
4,000,000 TRUST CONVERTIBLE PREFERRED SECURITIES
MCKESSON FINANCING TRUST
5% TRUST CONVERTIBLE PREFERRED SECURITIES
LIQUIDATION AMOUNT $50 PER CONVERTIBLE PREFERRED SECURITY
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
MCKESSON CORPORATION
-------------------
This Prospectus Supplement supplements and amends the Prospectus dated
June 18, 1997 (the "Prospectus") relating to the 5% Trust Convertible
Preferred Securities (the "Convertible Preferred Securities"), which
represent preferred undivided beneficial interests in the assets of
McKesson Financing Trust, a statutory business trust formed under the laws
of the State of Delaware, and the shares of common stock, par value $.01
per share, of McKesson Corporation, a Delaware corporation ("McKesson"),
issuable upon conversion of the Convertible Preferred Securities.
On October 29, 1997, McKesson's board declared a two-for-one split of
its common stock to be effected in the form of a stock dividend
distributable January 2, 1998 to stockholders of record on December 1,
1997.
McKesson and AmeriSource Health Corporation ("AmeriSource"), a leading
U.S. wholesale distributor of pharmaceutical and related health care
products and services, have signed a definitive merger agreement providing
for McKesson to acquire AmeriSource. On March 9, 1998, the U.S. Federal
Trade Commission (the "FTC") filed a complaint in the United States
District Court for the District of Columbia seeking a preliminary
injunction to halt the merger; a pre-trial hearing on the matter has been
set for May 11, 1998. On March 18, 1998, McKesson and AmeriSource each
announced that they will oppose the FTC's motion for preliminary
injunction. There can be no assurance that McKesson and AmeriSource will
prevail in their opposition to the FTC's request for a preliminary
injunction, that the merger will be completed, or that it will be completed
as contemplated or what the results of the merger might be.
Under the terms of the merger agreement, stockholders of AmeriSource
would receive a fixed exchange ratio of 0.71 shares of McKesson common
stock for each share of AmeriSource common stock. McKesson would issue
approximately 17.4 million new shares of common stock in the merger, and
would assume the long-term debt of AmeriSource which was approximately
$781.0 million at December 31, 1997. The merger of the two companies has
been structured as a tax-free transaction and would be accounted for as a
pooling of interests. The combined company would operate under the
McKesson name and would be headquartered in San Francisco.
Upon completion of the merger, R. David Yost, currently president and
chief executive officer of AmeriSource, would become group president of the
AmeriSource Services Group and a McKesson corporate vice president. Also
upon completion of the merger, McKesson's board of directors would be
expanded from nine to twelve members, which would include Yost and another
two directors from the current AmeriSource board.
The table on pages 56 through 58 of the Prospectus, which sets forth
information with respect to the Selling Holders (as defined in the
Prospectus) and the respective amounts of Convertible Preferred Securities
beneficially owned by each Selling Holder that may be offered pursuant to
the Prospectus (as supplemented and amended), is hereby amended by the
deletion of items 11 and 13 and the substitution thereof to that table as
follows:
<TABLE>
<CAPTION>
Convertible Convertible
Preferred Preferred
Securities Owned Number of Securities Owner
Prior to Offering Convertible After Offering
----------------- Preferred ------------------
"Selling Holder Number Percent Securities Offered Number Percent
- --------------- ------ ------- ------------------ ------ -------
<S> <C> <C> <C> <C> <C>
11. Allstate Insurance Company 60,000 1.500% 30,000
30,000 0.750%
13. Allstate Life Insurance
Company 65,000 1.625% 20,000
45,000 1.125%
</TABLE>
The Prospectus, together with this Prospectus Supplement, constitutes
the prospectus required to be delivered by Section 5(b) of the Securities
Act of 1933, as amended, with respect to offers and sales of the
Convertible Preferred Securities and McKesson Common Stock issuable upon
conversion of the Convertible Preferred Securities. All references in the
Prospectus to "this Prospectus" are hereby amended to read "this Prospectus
(as supplemented and amended)".
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER MATTERS DISCUSSED UNDER THE
CAPTION "RISK FACTORS" BEGINNING ON PAGE 6 OF THE PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus Supplement is May 22, 1998.
