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Acquisitions
 12 Months Ended
Aug. 31, 2022
Business Combination and Asset Acquisition [Abstract]  
Acquisitions Acquisitions and other investments
VillageMD acquisition
On November 24, 2021, the Company completed the acquisition of Village Practice Management Company, LLC (“VillageMD”). Pursuant to the terms and subject to the conditions set forth in the Unit Purchase Agreement, the Company purchased additional outstanding equity interests of VillageMD, increasing the Company’s total beneficial ownership in VillageMD’s outstanding equity interests from approximately 30% to approximately 63%, on a fully diluted basis, for a purchase price of $5.2 billion. The total purchase price is comprised of cash consideration of $4.0 billion and a promissory note of $1.2 billion. The cash consideration of $4.0 billion consisted of $2.9 billion paid to existing shareholders, including $1.9 billion paid to existing shareholders as part of the fully subscribed tender offer concluded on December 28, 2021, and $1.1 billion paid in exchange for new preferred units issued by VillageMD. Subject to notice being served, the Company has an option to prepay, and VillageMD has an option to require redemption of, the promissory note at any time. The promissory note is eliminated in consolidation within the Consolidated Balance Sheets.
The Company accounted for this acquisition as a business combination resulting in consolidation of VillageMD within the U.S. Healthcare segment in its financial statements. A non-controlling interest was recognized at fair value. In fiscal 2022, the Company recorded certain measurement period adjustments based on additional information primarily to certain assets and liabilities which did not have a material impact on goodwill. As of August 31, 2022, the Company had not completed the analysis to assign fair values to all tangible and intangible assets acquired. As such, the preliminary purchase price allocation will be subject to further refinement and may change, specifically as it relates to deferred taxes.

As a result of this acquisition, the Company recognized a pre-tax gain in Other income, net in the Consolidated Statements of Earnings of $1,597 million related to the fair valuation of the Company’s previously held minority equity interest. The Company also recorded a pre-tax gain of $577 million in Other income, net in the Consolidated Statements of Earnings related to the conversion to equity of the Company’s previously held investment in convertible debt securities of VillageMD, reclassified from within Accumulated other comprehensive income in the Consolidated Balance Sheets. A majority of the gains did not generate a tax expense.

The following table summarizes the consideration for the acquisition and the amounts of identified assets acquired and liabilities assumed at the date of the transaction (in millions):
Purchase Price Allocation:
Total purchase price$5,200 
Less: purchase price for issuance of new preferred units at fair value 1
(2,300)
Net consideration2,900 
Fair value of share-based compensation awards attributable to pre-combination services 2
683 
Fair value of previously held equity and debt3,211 
Fair value of non-controlling interest3,257 
Total$10,051 
Identifiable assets acquired and liabilities assumed:
Tangible assets 1
$634 
Intangible assets 3
1,621 
Liabilities(245)
Total identifiable net assets$2,010 
Goodwill$8,041 
1.Comprised of cash consideration of $1.1 billion and a promissory note of $1.2 billion. This consideration was provided in exchange for the issuance of new preferred units by VillageMD. VillageMD’s tangible assets acquired exclude this $1.1 billion of cash and $1.2 billion promissory note receivable.
2.Primarily related to vested share-based compensation awards.
3.Intangibles acquired include primary care provider network, trade names and developed technology, with a fair value of $1.2 billion, $295 million and $76 million. Estimated useful lives are 15, 13 and 5 years, respectively.

The goodwill represents anticipated future growth and expansion opportunities into new markets.

Shields acquisition
On October 29, 2021, the Company completed the acquisition of Shields Health Solutions Parent, LLC (“Shields”). Pursuant to the terms and subject to the conditions set forth in the Securities Purchase Agreement, the Company purchased additional outstanding equity interests of Shields, increasing the Company’s total beneficial ownership in Shields’ outstanding equity interests from 25% to approximately 70%, for cash consideration of $969 million. The Company accounted for this acquisition as a business combination resulting in consolidation of Shields within the U.S. Healthcare segment in its financial statements. A non-controlling interest was recognized at fair value. As of August 31, 2022, under the terms of the transaction agreements, the Company has an option to acquire the remaining equity interests of Shields in the future. Shields’ other equity holders will also have an option to require the Company to purchase the remaining equity interests. Considering the contractual terms related to the non-controlling interests, it is classified as redeemable non-controlling interests in the Consolidated Balance Sheets. As of August 31, 2022, the Company had not completed the analysis to assign fair values to all tangible and intangible assets acquired. As such, the preliminary purchase price allocation will be subject to further refinement and may change, specifically as it relates to deferred taxes.
As a result of this acquisition, the Company remeasured its previously held minority equity interest in Shields at fair value resulting in a pre-tax gain of $402 million recognized in Other income, net in the Consolidated Statements of Earnings. A majority of the gains did not generate a tax expense.

The following table summarizes the consideration for the acquisition and the amounts of identified assets acquired and liabilities assumed at the date of the transaction (in millions):

Purchase Price Allocation:
Cash consideration$969 
Fair value of share-based compensation awards attributable to pre-combination services13 
Fair value of previously held equity interests502 
Fair value of non-controlling interests589 
Total$2,074 
Identifiable assets acquired and liabilities assumed:
Tangible assets$84 
Intangible assets 1
1,060 
Liabilities(528)
Total identifiable net assets$616 
Goodwill$1,457 

1.Intangibles acquired include customer relationships, trade names and developed technology, with a fair value of $896 million, $47 million and $117 million. Estimated useful lives are 13, 13 and 5 years, respectively.

The goodwill represents anticipated future growth and expansion opportunities into new healthcare offerings.

On September 20, 2022, the Company announced the acceleration of its plans for full ownership of Shields. The Company entered into a definitive agreement to acquire the remaining 30% equity interest for approximately $1.37 billion of cash consideration. The transaction is expected to close in the second quarter of fiscal 2023. See Note 21. Subsequent events for further information.

CareCentrix acquisition
On August 31, 2022, the Company completed the acquisition of CareCentrix. Pursuant to the terms and subject to the conditions set forth in the Membership Interest Purchase Agreement, the Company acquired approximately 55% controlling equity interest in CareCentrix, a leading player in the post-acute and home care management sectors, for cash consideration of $332 million, subject to certain purchase price adjustments. The cash consideration includes $12 million paid to employees, which was recognized as compensation expense by the Company.

The Company accounted for this acquisition as a business combination resulting in consolidation of CareCentrix within the U.S. Healthcare segment in its financial statements. A non-controlling interest was recognized at fair value. As of August 31, 2022, under the terms of the transaction agreements, the Company has an option to acquire the remaining equity interests of CareCentrix in the future. CareCentrix’s other equity holders will also have an option to require the Company to purchase the remaining equity interests. Considering the contractual terms related to the non-controlling interests, it is classified as redeemable non-controlling interests in the Consolidated Balance Sheets. As of August 31, 2022, the Company had not completed the analysis to assign fair values to all tangible and intangible assets acquired. As such, the preliminary purchase price allocation will be subject to further refinement and may result in changes. These changes may relate to finalization of the fair value of the purchase consideration and the allocation of purchase consideration to all tangible and intangible assets acquired and identified.
The following table summarizes the consideration for the acquisition and the preliminary amounts of identified assets acquired and liabilities assumed at the date of the transaction (in millions):

Purchase Price Allocation:
Cash consideration 1
$320 
Contingent consideration4 
Fair value of share-based compensation awards attributable to pre-combination services66 
Fair value of non-controlling interests217 
Total$607 
Identifiable assets acquired and liabilities assumed:
Tangible assets$358 
Intangible assets 2
460 
Liabilities(665)
Total identifiable net assets$153 
Goodwill$454 
1.Excludes $12 million of cash paid to employees, which was recognized as compensation expense by the Company.
2.Intangibles acquired include customer relationships, trade names and developed technology, with a fair value of $284 million, $90 million and $86 million, respectively. Estimated useful lives are 15, 13 and 5 years, respectively.

The goodwill represents anticipated future growth and expansion opportunities into new healthcare offerings.

On October 11, 2022, the Company announced the acceleration of its plans for full ownership of CareCentrix. The Company entered into a definitive agreement to acquire the remaining 45% equity interest for approximately $392 million of cash consideration. The acquisition is subject to limited customary closing conditions and is expected to close by March 2023. See Note 21. Subsequent events to the Consolidated Financial Statements included in Part II, Item 8 herein for further information.

Supplemental pro forma information
The following table represents unaudited supplemental pro forma consolidated sales for the twelve months ended August 31, 2022 and 2021, respectively, as if the acquisitions had occurred at the beginning of each period. The unaudited pro forma information has been prepared for comparative purposes only and is not intended to be indicative of what the Company's results would have been had the acquisitions occurred at the beginning of the periods presented or results which may occur in the future.

(Unaudited, in millions)20222021
Sales$134,314 $135,306 

Actual sales of the acquisitions for the twelve months ended August 31, 2022 included in the Consolidated Statement of Earnings are as follows:    
(in millions)2022
Sales$1,795 

Pro forma net earnings of the Company, assuming the acquisitions had occurred at the beginning of each period presented, would not be materially different from the results reported.

See Note 17. Segment reporting for further information.

Other acquisitions and investments
The Company acquired certain prescription files and related pharmacy inventory primarily in the U.S. for the aggregate purchase price of $196 million and $108 million during fiscal 2022 and 2021, respectively.