Walgreens completes Alliance Boots acquisition

US drug retailing giant Walgreen Co has completed the acquisition of Switzerland-based Alliance Boots GmbH, forming a new company Walgreens Boots Alliance Inc (WBA), aiming for global expansion of its pharmaceutical business.

The transaction was approved at a special meeting of Walgreens shareholders, with approximately 97 per cent of the shareholders, or 73 per cent of the company's outstanding common stock, favouring the reorganisation, exercising their call option to acquire the remaining 55-per cent stake in Alliance Boots for $5.3 billion.

Further to the closing, both the companies will now be fully combined to form the first global pharmacy-led, health and wellbeing enterprise.

WBA acting CEO Stefano Pessina said: "We have forged a worldwide healthcare champion, which will provide innovative ways to address global health and wellbeing challenges by helping to shape retail pharmacy, health care and pharmaceutical wholesale markets around the world.''

"Becoming global gives us the ability to generate significant and sustainable benefits for local markets and all stakeholders, from consumers and patients, to pharmacists, suppliers, business partners and, of course, our employees," he further stated.

The final move follows a long-term strategic partnership launched between Walgreens and Alliance Boots as early as in June 2012, when Walgreens acquired a 45-per cent stake in Alliance Boots. (See: Walgreens prepares to buy British pharmacy retailer Alliance Boots in a $17.6-bn deal)

Under the deal, Walgreen had the option to acquire the remaining 55-per cent stake in August 2014.

The reorganisation will result in Walgreens operating as a wholly-owned subsidiary of WBA. Shares of Walgreens common stock will be converted into shares of the combined entity on a one-for-one basis.

WBA will have its headquarters in Deerfield, Illinois, where Walgreens had its base.

Walgreens was the largest drugstore chain in the US with fiscal 2014 sales of $76 billion. Its services include retail, specialty, infusion, medical facility and mail service, along with online and mobile services. The company has 8,230 drugstores across the US and manages more than 400 healthcare clinics.

Alliance Boots was a multinational pharmacy-led health and beauty group with its corporate headquarters in Bern, Switzerland and operational headquarters in Nottingham and Weybridge in the UK.

The company was formed in 2006 through the merger of   British pharmacist Boots Group and the pan-European wholesale and retail pharmacy group Alliance UniChem. It was taken private a year later by private equity firm KKR and Italian billionaire Stefano Pessina for £12.4 billion. The group has presence in over 25 countries and reported revenue of £23.4 billion in fiscal 2013-2014. 

The WBA, with over 12,800 stores in more than 25 countries, employs over 370,000 people and extends its products through more than 340 pharmaceutical distribution outlets serving 180,000 pharmacies and health care units.

WBA shares, which have started trading on Nasdaq ended at $76 yesterday with a market capitalisation of 71.92 billion.