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Walgreen to Pay $6.7B for Stake in Alliance Boots

Walgreen (NYSE:WAG) announced Tuesday that it will acquire a 45% stake in Switzerland-based Alliance Boots for $6.7 billion. The acquisition marks Walgreen’s first overseas purchase, the Associated Press noted. Walgreen said it will pay $4 billion in cash and 83 million shares for its stake in the health and beauty retail chain that operates 3,300 stores across Europe.

The deal isn’t sitting well with investors: Walgreen shares fell more than 6% in Tuesday morning trading.

The company anticipates the purchase to be complete by September. Under terms of the deal, Walgreen has an option to acquire the remaining interest in Alliance Boots in three years for $9.5 billion.

Walgreen says it expects the Alliance Boots stake to contribute between 23 cents and 27 cents of earnings per share in the first year.

Also on Tuesday, Walgreen posted third-quarter earnings that fell 11% to $537 million on revenue that slipped 3% to $17.75 billion. Quarterly EPS was 62 cents, which was in line with analysts’ expectations, the AP noted. Revenue for the quarter trailed analysts’ forecasts, however. The sales drop mostly stems from Walgreen’s break with Express Scripts at the end of last year.

The company also announced that is quarterly dividend would be increased 5 cents to 27.5 cents and would be paid in September.

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