NEW YORK — Walgreen Co.’s deal to buy a large stake in Alliance Boots, with the aim of acquiring the company later on, could land the U.S. drug chain’s shares on the London exchange.
Walgreens president and chief executive office Greg Wasson has told The Sunday Telegraph that a listing on the London Stock Exchange may be in the cards for his company as a result of the agreement.
Responding to a question about that possibility, Wasson said to The Telegraph, "Certainly. We’ve had a pretty good investment base in the U.K. and Europe, and we hope that that will grow as a result of the deal."
In its article on Saturday, The Telegraph said Walgreens probably would execute such a move through a secondary listing in London and that Wasson’s response illustrates the chain’s global aspirations.
Under the blockbuster deal unveiled last week, Walgreens plans to purchase a 45% equity interest in Boots for $6.7 billion in cash and stock, and the U.S. chain has the option to buy the other 55% of the company in about three years for $9.5 billion in cash and stock. Pending approvals, Walgreens’ initial investment is expected to be completed by Sept. 1.
Boots, which was taken private in 2007 via a buyout led by billionaire executive chairman Stefano Pessina and investment firm Kohlberg, Kravis Roberts & Co. (KKR), would return to the public market under the deal with Walgreens.
In a Q&A-style investors meeting on Friday, Wasson, Pessina, Walgreens chief financial officer Wade Miquelon and Boots group finance director George Fairweather said the two-step merger agreement marks a huge opportunity to create a global, pharmacy-led health care powerhouse and an iconic brand.
"We saw this as an opportunity to strengthen our core business and grow outside the U.S. and in emerging markets," Wasson said during the event.
Walgreens, with fiscal 2011 sales of $72 billion, operates 7,890 drug stores in all 50 states plus over 700 in-store and work-site health care clinics. Alliance Boots, with overall sales of about $35.7 billion, has more than 3,330 health and beauty retail stores, just over 3,200 of which have a pharmacy. Boots’ pharmaceutical wholesale businesses supply medicines, other health care products and related services from over 370 distribution centers in 21 countries.
