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US pharmacy giant Walgreen has successfully completed its acquisition of European pharmacy Alliance Boots and now it will disclose its working plan in July or early August, trying to close a performance gap with competitors such as CVS Caremark.
Insiders say such a disclosure will give crucial indication about the fate of the drug giant after CEO Gregory Wasson took its reins from family ownership in 2009. In recent weeks, the industry insiders are speculating over whether the drug giant will opt for buying the rest of Switzerland-based Alliance Boots that it doesn’t already own. They think Walgreen may go for a corporate inversion, in which a U.S. company claims residence in a foreign country to reduce its tax bill.
Industry experts say several other firms, particularly those in the pharmaceutical sector, have taken that step this year.
The company has pulled its goals for fiscal year 2016 amid several key decisions over its partnership with the European drug giant Alliance Boots still awaiting to be finalized.
“I and Alliance Boots Executive Chairman Stefano Pessina are working on step two of our partnership. We are working on ‘complex issues’,” Walgreen Chief Executive Greg Wasson said on Tuesday.
In 2012, Walgreen spent USD 6.7 billion to buy nearly half of Alliance Boots, with the option to buy the entire company before 2016.
According to Walgreen, its board is chalking out strategies including evaluating the combined management teams, cost reduction moves and potential changes in its future capital structure.
The company says it is expecting an update for investors by late July or early August. Walgreen is now projecting the second year of its partnership with the European drug giant to generate USD 400 million to USD 450 million in cost savings, up from USD 375 million to USD 425 million.