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Walgreens to take full ownership of Alliance Boots in early 2015

Walgreens president Greg Wasson forecast flat profits for the combined company for the next two years 

US pharmacy giant Walgreens will complete its merger with Alliance Boots in 2015 and increase its shares from 45 per cent to 100 per cent in the first quarter of next year. Walgreens president Greg Wasson says he is "excited" about the opportunities that will be created by the merger

US pharmacy giant Walgreens has announced it will complete its buy out of Alliance Boots in 2015.

The US chain will increase its shares in the multinational company from 45 per cent to 100 per cent in the first quarter of next year, it announced yesterday (August 6), to trade under the combined title of Walgreens Boots Alliance.

The move marks the final stage of the deal announced in 2012, which set out to make the combination of the two companies "the global leader in pharmacy-led, health and wellbeing retail".

Walgreens president Greg Wasson, who has been appointed CEO of the combined company, predicted "flat" profits over the next two years in a webcast held today (August 6). Profits for 2016 were unlikely to exceed $7.2 billion (£4.3 billion) despite initial projections of up to $9bn (£5.3bn), he said. 

The company would aim to make $1bn (£593m) in combined savings by 2017 – later than its original target date of 2016 due to "global pressure" on pharmacy income, he added. 

But Mr Wasson stressed there were opportunities for growth from 2017 onwards by focusing on retail, integrated pharmacy and healthcare services and global wholesaling opportunities. 

Walgreens Boots Alliance will own more than 11,000 stores across 10 countries and will have the world's largest pharmaceutical wholesale and distribution network. Its newly formed management team will feature six Walgreens employees – including Alex Gourlay, who held the position of health and beauty chief executive at Alliance Boots until last year – and five Alliance Boots employees. 

Former Alliance Boots executive chairman Stefano Pessina will assume the role of vice-president and hold responsibility for both strategy and mergers and acquisitions. In January, Mr Pessina narrowly survived an investor rebellion that could have restricted his powers at the company.

Under the new structure, Boots will be a division of the company in its own right and its headquarters will remain in Nottingham, while the global company's headquarters will be in Chicago. The company decided against moving its headquarters out of the US for tax purposes after "extensive analysis" of the benefits and disadvantages, Mr Wasson said.

Mr Pessina admitted he was not "particularly happy" about either company's financial performance over the past two years and said the merger would enable them to "renew their focus". 

The buyout will be subject to shareholder and regulatory approvals. 

What do you think of Walgreens' buyout of Alliance Boots?

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M Yang, Community pharmacist

With the PDA's efforts to achieve formal recognition (having submitted it to Parliament already, if I'm not mistaken), I'm surprised they're not trying to accelerate this complete takeover and stamp out trade union activity with all haste.

M Yang, Community pharmacist

Glad I packed it up with Boots. To my friends still working for this company, I wish them well. The plus £35K salary is worth baldness, hypertension and an early death.

Chris Locum, Locum pharmacist

Who can say what the future holds but seeing badged vendors outside GPHC of C +D in future years would not surprise me any more than 'combined' savings which will come with all these corporate acquisitions....

Mohammed Shabir, Community pharmacist

can you imagine what they would have done to the co-op if they would have taken over. fingers crossed for all my boots pharmacy friends. better all join pda.

N O, Pharmaceutical Adviser

Does this mean the employees who used to get booted will now be walled and then booted ?? Just kidding ;-) Am I ?

[email protected], Community pharmacist

So these "global wholesaling opportunities", would that be the selling of English packs to the US.

So more shortages. Not to worry, it'll only stress the patients a bit more.

S N,

Wake up will you. There are only ever stock shortage because there are a number of pharmacists out there who strip maximum quotas they can even when they do not need it to export for profit.
You should start looking at your colleagues for where the problems really lie!

Meera Sharma, Community pharmacist

Given the "savings" that have already been made and their consequences, one wonders how much more you strip a company. Very worrying news for the pharmacy profession.

Clive Hodgson, Community pharmacist

One very significant comment from the new WBA Company appeared on the BBC website yesterday:

“However, it (WBA) will also look to make cost reductions of $1bn over three years at "corporate, field and store-level".”

Jayesh Joshi, Locum pharmacist

Hi I'm due to be an optometrist. I'm also a pharmacist and was wondering will walgreens be taking over the optometry arm as well?

Jayesh (Pharmacist) - London

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