Dive Brief:
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Walgreens, American’s largest drugstore retail chain, may wholly own the U.K.’s largest drugstore chain, Boots, within a year.
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Walgreens already has a 45% stake in Boots, which it acquired in 2012 for $6.7 billion, and has an option to buy the rest between February and August 2015.
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The move would give the U.S. retailer a significant tax advantage because it could decrease its corporate tax rate from 37.5% to 20% by shifting its headquarters to the U.K. or Switzerland via complete Boots ownership.
Dive Insight:
Activist investors and Boots CEO Stefano Pessina are pushing the American drugstore retailer to buy the remaining shares of the U.K.’s Boots even before 2015, but Walgreens representatives would only say that they will do what is best for its shareholders. Walgreens’ Boots interest has allowed it to expand into Europe and Asia. Full ownership would allow the company to be headquartered in Switzerland, where it could realize billions of dollars of annual tax savings.