Walgreens said Monday that it also plans to name a second new director to its board as the company moves forward to complete its merger with Alliance Boots GmbH.
Early last month, Walgreens and Alliance Boots unveiled a plan to form a new, Chicago-based holding company called Walgreens Boots Alliance Inc., which will have four divisions: Walgreen Co.; the Boots pharmacy, health and beauty chain; Pharmaceutical Wholesale and International Retail; and Global Brands. Walgreens had faced pressure from investors to take advantage of significant tax benefits by redomiciling in Switzerland, where Alliance Boots has its headquarters.
“We are very pleased to welcome Barry to the board,” Walgreens president and chief executive officer Greg Wasson said in a statement. “Barry’s experience and expertise in building shareholder value on behalf of companies will be important as we establish the Walgreens Boots Alliance and carry out our Next Chapter plan for long-term growth and value creation. He will add tremendous value to our board and help drive value for shareholders.”
Walgreens is one of the top holdings of New York-based JANA Partners, whose overall investments top $11 billion. JANA currently holds 12.5 million shares, or 1.3%, of Walgreens common stock.
“I look forward to serving as a voice for all shareholders in joining the Walgreens board,” Rosenstein stated. “I am eager to work constructively with Greg, [executive chairman] Stefano Pessina and the entire Walgreens board to help unlock greater value for shareholders and to help realize the exceptional future for these two iconic companies as they come together and move ahead.”
JANA also will get a say in naming another director to Walgreens’ board. Walgreens said that in connection with Rosenstein’s election, the company has entered into a nomination and support agreement with JANA that provides for the appointment of an additional independent director recommended by JANA and agreed to by Walgreens. If a board vacancy arises during the term of the agreement, Walgreens and JANA will mutually agree on a replacement.
Also under the agreement, Rosenstein will resign from the Walgreens board if JANA and its affiliates’ holdings of Walgreens common stock fall below 6.25 million shares. JANA, too, has agreed to cap its interest in Walgreens at 4.9% while Rosenstein serves on its board.
“We are pleased to welcome Barry to the board in this pivotal moment for our company as we anticipate the completion of the Walgreens-Alliance Boots merger, establish an efficient global platform for pharmacy-led health and well-being, and launch a new generation of growth and value creation,” commented Walgreens chairman James Skinner. “We look forward to the experience and new perspectives he will bring to the board and company as we launch Walgreens Boots Alliance Inc.”
On Monday, Walgreens also said it plans to hold an investor day soon after the completion of the Alliance Boots merger in order to provide insight into the company’s financial outlook, business strategy and capital structure.