The Walgreen Company has announced its plan to acquire the remaining part of British pharmacy chain Alliance Boots that it does not own in a deal worth $5.27 billion plus about 144.3 million Walgreens shares. This would bring The Walgreen Company’s total stores to about 11,000 operated in 10 countries. The new holding company, which will be called Walgreen Boots Alliance, plans on keeping its headquarters in Chicago.
This deal is part of a trend of American companies seeking to acquire smaller foreign companies in an effort to avoid higher corporate taxes in the United States, known as inversion, while having an overseas presence. Walgreens was unable to have an inversion deal, as it required the company to renegotiate its terms with Alliance Boots, which Boots did not agree to.
“The company concluded it was not in the best long-term interest of our shareholders to attempt to re-domicile outside the U.S.,” says Gregory D. Wasson, Walgreen’s president and CEO, in a news release.
Wasson went on to say that the full acquisition of Alliance Boots, “was in the best interest of our shareholders, and with this decision, we are now moving forward on an accelerated basis to create the global leader in pharmacy-led health and well-being.”
The deal is expected to close in the first quarter of 2015 after shareholder and regulatory approval. Walgreens purchased a 45 per cent stake in Alliance Boots in 2012, along with a three-year option to acquire the remaining 55 per cent. At that time, Walgreens paid approximately $6.7 billion for its share of the company.
