Walgreens to remain headquartered in the U.S.

August 6, 2014

Walgreens told investors its intention to acquire its remaining 55% interest in European pharmacy giant Alliance Boots-and that the company will continue to be based in the United States.

Walgreens told investors its intention to acquire its remaining 55% interest in European pharmacy giant Alliance Boots-and that the company will continue to be based in the United States.

Walgreens announced that it will pay $5.29 billion for Alliance Boots at current exchange rates, and about 144.3 million shares of Walgreens stock. The deal is expected to close in the first quarter of 2015. Two years ago, Walgreens purchased a 45% stake in Alliance Boots for $4 billion in cash and $2.7 billion in stock.

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Gregory Wasson will remain CEO of the combined company. Independent chairman James Skinner will be non-executive chairman the new company, which will be called Walgreens Boots Alliance.

“We are excited to move forward with the next important step in becoming a new kind of global healthcare leader,” Wasson said. “Expanding globally with Alliance Boots will make quality health care more affordable and accessible to communities here in America and around the world.

Some Wall Street insiders speculated that Walgreens would move its headquarters overseas to take advantage of tax loopholes. However, Wasson said the company decided to keep its tax headquarters in the U.S. after considering the potential political, legal, and consumer reaction to a move.

 

But Wasson told the Chicago Tribune that moving the company’s headquarters was not in the best long-term interest of shareholders.

Stefano Pessina, head of Alliance Boots, will be executive chairman of Alliance Boots and executive vice chairman of the combined company. Pessina will report to Wasson.

Analysts are forecasting that the combined company will earn $126 billion to $130 billion in revenue and adjusted earnings per share of $4.25 to $4.60.