Posted: Wednesday, August 6th 2014 at 1:37pm
Walgreen turns down inversion to cut tax bill
By The Associated Press
Walgreen plans to keep its roots firmly planted in the United States, saying it will no longer pursue an overseas reorganization that would have trimmed its U.S. taxes but drew political scorn.
The nation's largest drugstore chain - which bills itself as "America's premier pharmacy" - said Wednesday that it will buy the remaining stake in Swiss health and beauty retailer Alliance Boots that it does not already own.
The cash-stock deal is valued at more than $15 billion. Walgreen had contemplated the move since buying a 45 percent share in 2012.
Walgreen will not pull off an inversion, however, a tactic that has become increasingly popular with U.S. companies seeking tax relief, but which has sparked growing backlash in Washington.
The pressure from investors remains intense, however, and shares of Walgreen tumbled sharply Wednesday morning, after the Deerfield, Illinois, company announced its plans and lowered its 2016 earnings goal for the combined company.
There have been 47 U.S. companies that have put together inversions through tie-ups with foreign businesses over the past decade, according to the Congressional Research Service.
Several others are planning or considering the move. Those including the drugmaker AbbVie, which last month announced a roughly $55 billion combination with drugmaker Shire Plc, which is incorporated in the United Kingdom.
Walgreen, however, said it was not confident such a deal could withstand IRS scrutiny.
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