Walgreens (NYSE:WAG) moved one step closer to a final merger with Alliance Boots as shareholders voted to approve all proposals related to acquiring the remaining 55 percent of the European retail chain it does not already own and the reorganization of the company into a holding company structure.
The retailer held a special meeting of shareholders, during which 97 percent voted in favor of the reorganization proposal. The transaction will fully combine the two companies into a global, pharmacy-led, health and wellbeing enterprise, according to Walgreens.
Walgreens entered into the strategic partnership in June 2012, by acquiring a 45 percent equity ownership in Alliance Boots, with the option to proceed to a full combination by acquiring the remaining 55 percent of Alliance Boots. Walgreens exercised that option in August 2014.
All regulatory approvals have been received and following the Dec. 29 shareholder vote, Walgreens currently expects to complete the acquisition of Alliance Boots and the reorganization merger on Dec. 31.
The reorganization will result in Walgreens becoming a wholly-owned subsidiary of the newly formed Walgreens Boots Alliance Inc. Shares of Walgreens common stock will be converted into shares of Walgreens Boots Alliance common stock on a one-for-one basis.
Walgreens headquarters will remain in Deerfield, Illinois, in spite of earlier speculation that the chain would relocate to Europe in a so-called tax inversion that could have yielded sizable tax savings. That possibility was met with significant consumer backlash and forced the company to announce it would remain committed to its U.S. headquarters.
There will be other changes at Walgreens, however.
CEO and President Greg Wasson will retire following the special shareholder vote and Chairman James Skinner will take over as the new Walgreens Boots Alliance executive chairman. Stefano Pessina, executive chairman of Alliance Boots and member of the Walgreens board, will serve as acting CEO until the board selects a successor.
New formats are being developed and rolled out, and the company's real estate strategy is being revised as executives look to trim roughly $1 billion in costs following the merger, according to Forbes.
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