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Walgreen to keep HQ in U.S. as it buys rest of Alliance Boots

Walgreen Co. announced today that it will remain based in the U.S. after buying the remainder of pharmaceutical giant Alliance Boots.

The combined company will remain based in the Chicago area, Walgreen said, and current CEO Greg Wasson will remain CEO of the combined company.

Alliance Boots Executive Chairman Stefano Pessina will be executive vice chairman of the new company and will oversee handle strategy and M&A and report to Wasson, Walgreen said. Pessina also will chair a new strategy committee of the board of directors.

The new holding company is to be named Walgreens Boots Alliance Inc. and is to be based "in the Chicago area," Walgreen said in a statement. Walgreen's operations will remain based in north suburban Deerfield, with Boots operations based in its current location in the U.K., the statement said.

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Walgreen, the country's largest drugstore chain, had publicly acknowledged the possibility of moving its headquarters to Europe in April. It bought a 45% stake in Alliance Boots in 2012.

In making the headquarters decision, Wasson said in the statement:

“In line with our fiduciary duty to the company and our shareholders, we undertook an extensive and rigorous analysis with a team of leading experts to determine the most optimal — and sustainable — course of action,” Wasson said in thestatement. “We took into account all factors, including that we could not arrive at a structure that provided the company and our board with the requisite level of confidence that a transaction of this significance would need to withstand extensive IRS review and scrutiny. As a result the company concluded it was not in the best long-term interest of our shareholders to attempt to redomicile outside the U.S."

The company also said:

"As part of this process, the company considered a wide range of issues, including the potential financial benefits (and their sustainability) and the technical viability of a restructured inversion transaction under current U.S. law. The company also was mindful of the ongoing public reaction to a potential inversion and Walgreen's unique role as an iconic American consumer retail company with a major portion of its revenues derived from government-funded reimbursement programs."

Walgreen said it is to pay about $5.29 billion (at a current exchange rate of $1.69 per British pound) and about 144.3 million shares of Walgreen stock for the remaining 55% of Alliance Boots.

"Walgreen to keep HQ local as it buys rest of Alliance Boots" originally appeared on the website of Crain's Chicago Business.
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