Walgreen Co.’s share price down, to acquire the rest of Alliance Boots for $15.3 billion

Walgreen Co., the largest US drugstore chain, made an official statement today that it intends to acquire the 55% of Alliance Boots GmbH that it doesnt already own for $15.3 billion. The US company also explained that the takeover deal would not be used in order to move its tax address outside the country.

Currently, the company holds 45% in Alliance Boots, which is based in Switzerland and has pharmacy and beauty stores in Europe. The 45% of the company were bought in 2012 in a $6.7-billion deal. According to Walgreen Co.s statement, it is to pay about $5.29 billion in cash and $10 billion in Walgreen stock for the remaining 55% of Alliance Boots.

Walgreen Co. exercised its option to purchase the rest of the Switzerland-based company earlier than the original option period of between February and August 2015. In addition, the U.S. drugstore chain revealed that the takeover deal is expected to be finalized over the first quarter of the next fiscal year.

A buyback plan was also announced by Walgreen Co. The company shared that it intends to repurchase about $3 billion in stock and a to pay a quarterly dividend of 33.75 cents per share.

“We carefully and extensively evaluated the potential of an inversion,” including potential consumer backlash and political ramifications, before deciding against it, Gregory Wasson, the Walgreen CEO, said on a conference call with analysts, cited by Bloomberg. He also clarified that as a result, the companys board has decided that it was not in the best interest of its shareholders to attempt to re-domicile outside the U.S.

A growing number of US companies have recently succeeded in saving hundreds of millions of dollars in tax by relocating to Europe after completing takeovers on the continent.

Some of the significantly big mergers and acquisitions so far in 2014 have involved so-called “tax inversions” – where a US acquirer shifts overseas, to Europe in particular, to pay a lower rate.

Pfizer recently unsuccessfully attempted to acquire UK-based AstraZeneca for a reported $120 billion, in a bid to lower its tax rate by a so-called tax inversion move, in which it would redomicile in the UK, where corporate taxes are 21%, compared to the US 35%.

A number of other US pharmaceutical companies already completed tax inversions, including Mylan and AbbVie, while Hospira also considers the option.

Walgreen Co. was 12.62% down to trade at 60.40 dollars by 15:21 BST (14:21 GMT). The companys shares have gained 20.22% in the past twelve months, valuing it at $66.12 billion According to the information published on CNN Money, the 21 analysts offering 12-month price forecasts for Walgreen Co have a median target of $82.00, with a high estimate of $95.00 and a low estimate of $30.00. The median estimate represents a +18.63% increase from the last price of $69.12.