Walgreen, Alliance Boots Complete Merger To Form Walgreens Boots Alliance

(RTTNews) - Drugstore chain Walgreen Co. (WAG) and Switzerland-based Alliance Boots GmbH said Wednesday that they have completed the second step of their merger to form Walgreens Boots Alliance Inc. (WBA).

The two-step merger will create the first global pharmacy-led, health and wellbeing enterprise that combines drugstore chain Walgreens, European retail pharmacy leader Boots, and international wholesaler and distributor Alliance Healthcare.

Walgreens Boots Alliance common stock will trade on the Nasdaq stock exchange under the symbol "WBA". The company will be domiciled in the U.S. and headquartered in Deerfield, Illinois.

Together, Walgreens Boots Alliance spans more than 25 countries, with over 12,800 stores, over 370,000 employees and more than 340 pharmaceutical distribution centers serving more than 180,000 pharmacies and other points of care.

Walgreens and Alliance Boots announced their two-step strategic transaction in June 2012. The companies completed the first step of their merger in August 2012, when Walgreens invested about $4 billion in cash and 83.4 million shares of its common stock in exchange for a 45 percent equity ownership stake in Alliance Boots.

In the second step of the merger that was completed today, Walgreens acquired the remaining 55 percent stake in Alliance Boots in exchange for about $5.3 billion in cash and 144.3 million shares of stock.

Under a reorganization merger agreement approved earlier this week by Walgreens shareholders, Walgreens is now a wholly-owned subsidiary of Walgreens Boots Alliance. Walgreens said its existing shares of common stock were converted automatically into shares of Walgreens Boots Alliance common stock on a one-for-one basis.

Greg Wasson will retire as Walgreens president and CEO after completion of the merger. Stefano Pessina, executive chairman of Alliance Boots and a member of the Walgreens board of directors, will become acting CEO of Walgreens Boots Alliance after Wasson's retirement.

Pessina got a 7.6 percent stake in Walgreens after the company's acquisition of a 45 percent stake in Alliance Boots. Following the completion of the merger valued at about $15 billion, he would be the largest shareholder of the combined company.

Wasson said, "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."

Walgreens Boots Alliance will comprise three divisions - Retail Pharmacy USA, Retail Pharmacy International, and Pharmaceutical Wholesale. In addition, the company operates several global cross divisional functions, including Global Brands and a Global Pharmacy Market Access group.

In a separate statement, private equity giant private equity giant KKR & Co. L.P. (KKR) said it has sold its remaining stake in Alliance Boots to Walgreens Boots Alliance, the new holding company of Walgreen.

This follows the exercise by Walgreens of the call option to acquire the remaining 55 percent stake in Alliance Boots as the second step of the overall transaction. In August 2012, Walgreens acquired a 45 percent stake in Alliance Boots in the first step of the overall transaction.

Dominic Murphy, member, Head of KKR operations in the UK, will serve as a director on the board of directors of Walgreens Boots Alliance. KKR will hold 4.6 percent of the equity of Walgreens Boots Alliance.

WAG closed Tuesday's trading at $76.05, down $0.74 or 0.96 percent on a volume of 2.8 million shares.