Boston, MA 04/21/2014 (wallstreetpr) – The present CEO of Walgreen Company (NYSE:WAG) has had a difficult time with major stakeholders of the company on account of a confrontation over the control of the company. Demand for its relocation of the main administrative divisions from its present headquarters in Deerfield to an address in Europe. This decision was mainly influenced by the recent designs of WAG after the acquisition of Alliance Boots – GmBH based in Switzerland, which was to be finalized in the coming year.
It was in the month of March, when the company announced that it had no plans of relocating to a new office in Europe. The Walgreen management subsequently issued a statement that the company would safeguard the interest of the stakeholders at all times. This announcement came soon after the meeting on the April 11, in Paris between the senior executives of Walgreen Company (NYSE:WAG) and its main shareholders who held a combined stake of more than 5%.
Walgreen Company (NYSE:WAG) has the open option of acquiring the remainder of Alliance Boot in the near future, which most analysts believe will be opted for by the company to gain complete control. Mr. Pessina, already a major shareholder of Walgreen would stand to gain the most by this total acquisition, which would increase his stake holding in the company to 16%, the single largest shareholder.
The move to a destination in Europe would also benefit the company hugely in the form of taxes to be paid. Presently, the company pays taxes as per the U.S. corporate tax rate, which is 35%. A shift to some European destinations would reduce this drastically to a mere 20%, increasing profitability considerably. There is a strong lobby of the shareholders of Alliance Boot that are pressurizing the management to relocate its operations to a destination in Europe.
Although Stefano Pessina is not very well known in the US, he is widely respected in the European sector, where people trust his business ability. This may result in overruling the views of Walgreen’s present management.
