Walgreen Co. has agreed to buy a 45% stake in Alliance Boots, a European retail pharmacy chain, for $6.7 billion in a cash and stock transaction that will create the world's largest drugstore chain with more than 11,000 stores in 12 countries. The deal, which represents the Deerfield, Ill., company's first international expansion, is expected to close Sept. 1 and includes an option for Walgreen to take full control of Alliance Boots three years after the deal closes. Walgreen will pay the European pharmacy and beauty retailer $4 billion in cash and $2.7 billion in company stock. Walgreen Chief Executive Greg Wasson said in a conference call that the company intends to buy the remainder of Alliance Boots within three years. The total takeover is expected to cost $9.5 billion in a combination of cash and stock. He said the deal would create "immediate synergies" that would enable Walgreen to save as much as $150 million in the first year after the deal closes and as much as $1 billion by the end of 2016. Under terms of the transaction, Alliance Boots' executive chairman, Stefano Pessina, and Dominic Murphy of the investment firm KKR & Co. will join the Walgreen … Continue reading
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