Walgreen buying large stake in European chain
Drugstore chain Walgreen Co. says it will spend $6.7 billion to buy a stake in health and beauty retailer Alliance Boots. / AP Photo/Sergio Dionisio
Walgreen Co. (WAG) will pay $6.7 billion in cash and stock to buy a stake in European health and beauty retailer Alliance Boots in the first international venture for the largest U.S. drugstore chain.
The Illinois-based company plans to initially spend about $4 billion in cash and contribute more than 83 million shares for a 45 percent ownership stake in Swiss-based Alliance Boots, which runs more than 3,300 health and beauty retail stores in 11 countries. It also has a pharmaceutical wholesale business that supplies pharmacies, doctors and other health care providers in 21 countries.
Walgreen has an option to buy the rest of Alliance Boots in about three years in a deal valued at around $9.5 billion based on Walgreen's share price and the current exchange rate. The drugstore chain's shares closed at $31.96 on Monday and climbed to $32.20 Tuesday in premarket trading.
Walgreen expects the purchase of the initial stake to be completed by September. It operates 7,890 drugstores.
Walgreen operates nearly 7,900 stores in all 50 U.S. states.
Popular on MoneyWatch
- When it comes to vacations, the U.S. stinks
- Reverse cell phone lookup service is free and simple
- Amy's Baking Company could face legal 'nightmare'
- Snapple co-founder Leonard Marsh dies at 80
- TGI Fridays nailed for doctoring booze
- IMF chief named key witness in French payoff case
- Ellen DeGeneres buys Brad Pitt's Malibu home
- Amy's Baking Company: Post-meltdown PR campaign