A group of shareholders who own close to five percent of Walgreens' stock want the company to use its takeover of Alliance Boots, headquartered in Switzerland, as the rationale to move its headquarters from the U.S. to Europe, reports the Financial Times.
The reason for the move would be to reduce Walgreens' taxable income in the U.S. According to a note by analysts at UBS, the rate Walgreens pays prior to deductions is 37.5 percent compared to 20 percent for Boots.
The group calling for the move, Goldman Sachs Investment Partners, Jana Partners, Corvex and Och-Ziff, called for a meeting with the company after becoming frustrated with management's refusal to consider relocation. According to the FT piece, Walgreens management is concerned about "political risks" that could be associated with moving its headquarters out of the U.S.
A Crain's Chicago Business article suggests that the debate on where the company is headquartered amounts to "a battle for control of the company." Next year, Walgreens is expected to exercise its option to buy the remainder of Alliance Boots. Should that happen, the executive chairman of Boots, Stefano Pessina, will become the largest shareholder of the merged company with a 16 percent stake. The investor group pushing for the move to Europe, according to Crain's, has more confidence in Mr. Pessina than Walgreen Co. CEO Greg Wasson.