Walgreen To Buy 45% Stake in Alliance Boots for $6.7 Billion

Walgreen Co., the largest drug store chain in the US, will invest approximately $6.7 billion in cash and stock in exchange for a 45% equity ownership stake in Alliance Boots GmbH, the leading international pharmacy-led health and beauty group in the UK. Walgreens will have the option to proceed to a full combination by acquiring the remaining 55% of Alliance Boots in approximately three years’ time, according to the company.

The Boards of Directors of Walgreens and Alliance Boots have unanimously approved the transaction. Upon the completion of Walgreens initial investment in Alliance Boots, Gregory Wasson, president and chief executive officer of Walgreens; Wade Miquelon, executive vice president and chief financial officer; Thomas Sabatino, executive vice president and general counsel; and Robert Zimmerman, senior vice president and chief strategy officer; will join the Alliance Boots Board of Directors.



In addition, Stefano Pessina, executive chairman of Alliance Boots; and Dominic Murphy, director and member of KKR & Co. L.P.; will join the Walgreens Board of Directors. Alliance Santé Participations S.A., of which Pessina is a director and whose ultimate ownership is a family trust, will hold a significant stake in Walgreens.

According to Colin Hession, managing director of Colin Hession Consulting, “This deal is extremely strategic for HBA. It gives Walgreens a major entry point into Europe; it gives them Boots’ own label expertise for US domestic and it gets them into pharma wholesale.”