DEERFIELD, Ill. — Walgreen Co. and Alliance Boots have set up a joint venture company as part of their strategic partnership.
Walgreens said Tuesday that the new company, Walgreens Boots Alliance Development GmbH, was created for the partners’ synergy program. The joint venture is based in Bern, Switzerland.
A global pharmaceutical, health and beauty retailer and wholesaler, Alliance Boots has its operational headquarters in the United Kingdom but is based in Switzerland.
The largest U.S. drug chain announced in June that it would acquire a 45% equity interest in Alliance Boots for $6.7 billion in cash and stock. That part of the two-step deal was completed in early August.
Under the agreement, Walgreens has the option to buy the remaining 55% of Alliance Boots in about three years for $9.5 billion in cash and stock. During the six-month period starting two-and-a-half years after the closing of the initial investment, Walgreens can choose to proceed to a full combination and purchase the remaining 55% equity interest in Alliance Boots.
The companies said that if Walgreens doesn’t exercise that option, under certain circumstances, its ownership of Alliance Boots would decrease from 45% to 42%, in exchange for nominal consideration to Walgreens.
Walgreens executives, however, have said that all indications are that the company will proceed with the second phase of the deal.
