A group of shareholders of Walgreens Co. are pushing to have the firm’s corporate headquarters move to Europe to leverage on favorable tax regimes.
Shareholders controlling about 5% stake in the company asked its management to utilize its ownership of Alliance Boots shares to shift its legal base to Europe.
The lobbying took a place at a private gathering of the owners and company management in Paris on Friday.
Walgreens, which is one of the highest taxed corporates in the world, can employ tax inversion to reduce the amount of earnings exposed to US taxation, as Reuters reports.
Chief executive of Walgreens Greg Wasson, the company’s Chief Financial Officer Wade Miquelon and chairman of Alliance Boots Italian billionaire Stefano Pessina attended the meeting.
However, the US operator of drug stores has not acknowledged any intention to relocate to Europe. The firm’s spokesperson Jim Graham said that meeting with investors was not unusual and that Walgreen always welcomed shareholder contribution.
“Our focus is always on analyzing and doing what is in the best long-term interest of our company and its shareholders,” Graham is quoted by Chicago Tribune as saying.
Graham added that the company would readily report anything conclusive about future strategies and structures that were being considered.
Walgreens acquired 45% stake in Alliance Boots, the largest drug-store chain operator in Europe, in 2012 and secured an option to buy the remainder in 2015.
The shareholders, who include Jana Partners, Corvex and Och-Ziff, also sought to have the management team of Alliance Boots given an expanded role in running the combined businesses.
The shareholders were not available for comment.
Based in Deerfield, Illnois, Walgreens announced quarterly earnings for the fiscal period ended February 28 that were below expectations, but was upbeat about a bigger gain in 2014 following its merger with Alliance Boots. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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