Walgreens Boots Alliance is new public company
DEERFIELD, Ill. – As expected, Walgreen Co. and Alliance Boots GmbH have finalized the second step of their two-part merger agreement following Walgreens shareholders’ approval earlier this week.
Coming just before the new year, the completion of the deal announced in 2012 reorganizes Walgreens into a subsidiary of a new holding company, Walgreens Boots Alliance Inc., which has its headquarters in Deerfield, Ill.
Shares of Walgreens common stock have been converted into shares of Walgreens Boots Alliance common stock on a one-for-one basis. Walgreens Boots Alliance common stock now trade on Nasdaq under the symbolWBA.
Led by an international management team, Walgreens Boots Alliance encompasses three divisions: Retail Pharmacy USA, Retail Pharmacy International and Pharmaceutical Wholesale. The company also operates a number of global cross divisional functions, including Global Brands and a Global Pharmacy Market Access group.
The completion of the merger also initiates the departure of Walgreens president and chief executive officer Greg Wasson, who last month announced that he planned to retire once the deal closed. Plans call for Stefano Pessina, executive chairman of Alliance Boots, to become acting CEO of the Walgreens Boots Alliance upon Wasson’s retirement.
“The creation of Walgreens Boots Alliance is a crucial milestone for both Walgreens and Alliance Boots, combining iconic brands, complementary geographic footprints, shared values and a heritage of trusted health care services through pharmaceutical wholesaling and community pharmacy care, each dating back more than 100 years,” Wasson said in a statement. “The combination instantly establishes a groundbreaking and game-changing new company that will help people across the world lead healthier and happier lives as we advance our industry and the delivery of retail health, well-being and beauty products and services worldwide.”
Walgreens Boots Alliance brings together Walgreens, the largest U.S. drug chain, with Boots, the market leader in European retail pharmacy; and Alliance Healthcare, the leading international wholesaler and distributor.
Overall, the global enterprise spans more than 25 countries, with over 12,800 stores, 370,000 employees and 340 pharmaceutical distribution centers serving more than 180,000 pharmacies and other points of care. The merger also brings together a unique brand portfolio of outstanding retail, wholesale, service and product brands, alongside the world’s largest pharmaceutical wholesale and distribution network.
“The combined strength, scale and expertise of Walgreens Boots Alliance creates a unique and unparalleled global leader,” Pessina stated. “We have forged a worldwide health care champion, which will provide innovative ways to address global health and well-being 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.”
Walgreens and Alliance Boots announced their deal to form what they called the world’s first global pharmacy-led, health and well-being enterprise in June 2012. They completed the first step of the transaction that August 2012, when Walgreens invested about $4 billion in cash and 83.4 million shares of its common stock for a 45% stake in Alliance Boots. In completing the second step on Dec. 31, Walgreens acquired the remaining 55% of Alliance Boots in exchange for about $5.3 billion in cash and 144.3 million shares of stock.
“On behalf of the board, I would like to express our gratitude to Greg for his outstanding vision, work and commitment towards creating this new company,” commented Walgreens chairman Jim Skinner, who with the completion of the merger becomes chairman of Walgreens Boots Alliance. “I am looking forward to working closely with Stefano and the senior management team of Walgreens Boots Alliance as we start this exciting mission of bringing better health and well-being to the world.”
Shortly after Walgreens reported the completion of the second step of the merger, investment firm Kohlberg, Kravis Roberts & Co. (KKR) announced the sale of its remaining stake in Alliance Boots to Walgreens Boots Alliance.
KKR will hold a 4.6% equity interest in Walgreens Boots Alliance. Dominic Murphy, a member of KKR and the head of its United Kingdom operations, will serve as a director on the Walgreens Boots Alliance board. Murphy had joined the Walgreens board when the drug chain completed the first part of the Walgreens-Boots transaction.
“Since Alliance Boots was taken private in 2007, a strong investment program has led to a transformation of the company, both at the retail and distribution side, and to a strong international expansion across Europe, the Middle East and Asia,” Murphy stated. “In 2012, we created, together with Walgreens, the world’s largest pharmacy-led health and well-being enterprise. Since then, Alliance Boots and Walgreens have made strong progress in executing on all synergies and plans, allowing the announcement [on Dec. 31] of the full combination.”