(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. Walgreens 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 a growing backlash in Washington. The pressure from investors remains intense, however, and shares of Walgreen tumbled 14.3 percent to $59.21.
In an inversion, a U.S. company reorganizes in a country with a lower tax rate by acquiring or merging with a company overseas. Inversions allow companies to transfer money earned overseas to the parent company without paying additional U.S. taxes.
There have been 47 American companies that have put together inversions in the past decade, according to the Congressional Research Service. Several others are planning or considering the move, including the drugmaker AbbVie, which last month announced a roughly $55 billion combination with drugmaker Shire, incorporated in the United Kingdom.