US drug retailer Walgreen to pay $6.7BN for 45% stake in Alliance Boots

US drug retailer Walgreen Co said today it is buying a 45 percent stake in UK-based health and beauty products group Alliance Boots for $6.7 billion in cash and stock.

The combined company will be the world’s largest buyer of prescription drugs and will have more than 11,000 stores in 12 countries as well as 370 distribution centers delivering to more than 170,000 pharmacies, doctors and hospitals, Bloomberg reported.

Walgreen will initially invest about $4 billion in cash and 83.4 million shares for a stake in Alliance Boots, marking its biggest deal yet, the Wall Street Journal said.

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According to Reuters, Walgreen — the biggest drugstore chain in the United States — will have the option to buy the rest of Alliance Boots in 2015.

“We are looking forward to working with Alliance Boots to leverage our combined strengths and provide an even broader range of innovative, cost-effective products and services to patients and customers across the healthcare landscape,” Walgreens chief executive Gregory Wasson said in a statement.

“Together we will be ideally positioned to expand our customer offerings in our existing markets and become the health and wellbeing partner of choice in emerging markets.”

Neil Saunders, a retail analyst at UK research firm Conlumino, told the BBC the two companies were “very compatible” and the stake purchase would generate “a lot of savings.” 

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