Walgreen to keep U.S. tax domicile after buying Alliance Boots
By Emma Thomasson and Sruthi Ramakrishnan
(Reuters) - U.S. retailer Walgreen Co WAG.N said it would not use a full takeover of Europe's biggest pharmacy chain, Alliance Boots [ABN.UL], to move its domicile overseas, following fierce criticism of such tax-cutting deals at home.
Walgreen will buy the 55 percent it does not already own of Alliance Boots for 3.13 billion pounds ($5.3 billion) in cash and 144.3 million shares, giving a total deal of about $15 billion.
Walgreen shares fell as much as 16 percent to $58.30 on Wednesday.
The U.S. group said the combined company, with more than 11,000 stores in 10 countries, would keep its tax domicile in the United States, with headquarters in the Chicago area. It is targeting combined revenue for 2016 of $126-130 billion.
Walgreen's retreat is the third major possible tax "inversion" deal to collapse in recent months amid heightened political sensitivity in the United States to such transactions.
President Barack Obama told reporters on Wednesday that his administration plans to move quickly on measures to discourage the use of inversions.
"We don't want to see this trend grow," Obama said at a news conference, not specifically mentioning Walgreen, which is based in his home state of Illinois.
"That kind of herd mentality is something we want to avoid, so we want to move quickly, as quickly as possible," Obama said. Continued...