US pharmacy chain Walgreens is reportedly near a complete takeover of UK pharmacy chain Boots.
Walgreens purchased 45 per cent of Boots shares in 2012, for approximately £4.3 billion. It retained a three-year option to pursue a full purchase, and it now looks like it will buy the remaining 55 per cent for approximately £5 billion. The majority of the remaining 55 per cent is owned by private equity firm KKR.
Walgreens had originally planned to move its corporate headquarters to the UK or Switzerland in a tax-inversion scheme, but it now appears that it will remain a US-domiciled company. Tax inversions have become increasingly unpopular in the US as of late, with president Barack Obama speaking out against them, saying that companies that move their headquarters overseas to save tax are damaging the US economy. The inversion would also have required renegotiation of an existing deal with Boots, something of which Boots was apparently not in favour.
Boots' parent company, Alliance Boots, is itself headquartered in Switzerland, and Walgreens' shareholders may be disappointed by the decision not to pursue the inversion, as many were keen for the company to exploit the tax savings that are possible if the headquarters were to be moved to Switzerland.
The full takeover of Boots is likely to take place next year, between February and August.
Walgreens operates over 8,200 shops in 50 US states. The takeover of Boots will create a pharmacy giant with over 11,000 stores worldwide.
