Walgreen pressured to ditch US for Europe

The company's tax rate of 37.5% could drop to 20% overseas. Some shareholders are pushing for a move.

By MSN Money Partner Apr 14, 2014 12:44PM
People walk by a Walgreens in Boston, Mass., on April 30, 2013 (Photo by Wendy Maeda/The Boston Globe via Getty Images)By Tim Rostan, MarketWatch

Drugstore chain Walgreen Co. (WAG) has come under intensifying shareholder pressure to use its large ownership stake in the Swiss-based Alliance Boots as a justification to re-domicile in Europe and reduce its U.S. tax bill, according to a Financial Times report.

Walgreen, headquartered in the Chicago suburb of Deerfield, acquired 45 percent of Alliance Boots in 2012 and holds an option to purchase the remainder of the company. The first Walgreen’s opened in Chicago in 1901.


At a private meeting convened Friday in Paris, the FT reports, investors owning a nearly 5 percent aggregate stake in Walgreen pressed the case for shifting Walgreen's headquarters out of the U.S.


UBS analysts recently put Walgreen's tax rate at 37.5 percent in comparison, according to the FT, with the 20 percent rate paid by Alliance Boots.


The shareholder group at the Paris meeting is said to have included Goldman Sachs (GS) and several notable hedge-fund firms. Walgreen CEO Greg Wasson and CFO Wade Miquelon, as well as Alliance Boots Chairman Stefano Pessina, are reported to have attended.


Walgreen has been viewed as resistant to the notion of moving its head office overseas, with Crain's Chicago Business columnist Joe Cahill recently quoting a company spokesman as saying, "We have no plans for an inversion transaction," referring to a procedural step via which the company would relocate to a lower-tax country.


More from MarketWatch


Tags: WAG
139Comments
Apr 14, 2014 1:43PM
avatar
People thought Ross Perot was a quack who did not know what he was talking about when he said that NAFTA would lead to companies leaving America. I guess they feel kind of stupid now as thru additions and new legislation, 100's of companies have moved their headquarters over seas and we are quickly losing our ability to do anything in the world market. When I want to hear about how to get the country running again, I'll listen to a business person who runs companies. When I want to hear how to screw over the average American, I'll listen to a politician.
Apr 14, 2014 1:58PM
avatar
When politicians question why companies move overseas, one must ask the politicians if they understand basic math.  The US has the highest corporate tax rate in the civilized world, and businesses exist to make profits, not fund the government.  Caterpillar struck a deal with Switzerland to escape the high taxes of the US.  Then some democratic congressmen called them to DC to give them a tongue lashing.  So the same corrupt politicians that created all these tax loopholes demonize businesses from using them.  Got to love it.  There are over $2 trillion in corporate profits parked overseas due to our high tax rates and these loopholes.  Maybe eliminating these loopholes and lowering the overall corporate tax rate might help.  Then again, that would be logical, and DC lacks logic.
Apr 14, 2014 1:43PM
avatar
America, Land of the Free, has turned into a hostile environment to run a business.  Regulations and taxes are at all time highs, and the president sees profits as his for the taking, because they are evil.
Apr 14, 2014 2:06PM
avatar
""UBS analysts recently put Walgreen's tax rate at 37.5 percent in comparison, according to the FT, with the 20 percent rate paid by Alliance Boots.""
This is why corporations leave this country. We need to clean up the business tax laws to encourage corporations to stay here.
Apr 14, 2014 1:35PM
avatar
Maybe not Walgreens yet but what if Intel, Microsoft or others start to look at China, EU and India? I wonder what US citizens would think about US companies moving to where the majority of their business was going to be when they thought outsourcing of manufacturing and IT jobs was not fair?
Apr 14, 2014 1:40PM
avatar
If Walgreen and more companies turns away from the U.S. therefore, less companies to hire U.S. workers, thus creating less money to buy goods from those companies. Buy Made in America products only!
Apr 14, 2014 2:59PM
avatar
So the FDA has now swooped in on the brewers and distillers in the country. They want them to have to take their spent grains, that are currently being sold to livestock farmers for feed as is, or  agreements were made to purchase their grains at a better price and give it back to them as a Smart business move and a way to get double duty out of the raw grain/feed. The FDA wants' it treated as pet food.  Which would mean the spent grains have to be dried and pelletized before the livestock can eat it. Ship it here ,ship it there, cook all the nutrients out of it and hopefully sell it to farmers. Triple the energy costs of something , ruin its value and think it won't raise the cost of anything, Yea that sounds about right.   Does the Gov. have IQ tests for employees????
Apr 14, 2014 2:27PM
avatar
If i can make or sell a product but have to run in a circle 5 times, do 20 pushups, and take out 10 permits,  OR  set up a business, manufacture and sell  the same product without doing any of those and can concentrate on the best product and service, most would go with B.  Unless your a moron,  who makes all these laws and rules?  Guess there are even more inferior minds called politicians. 
Apr 14, 2014 3:32PM
avatar
GE paid $0 federal income tax in 2012.  Immelt pushed his employees to vote for Obama due to the fact he would help their company out due to their "green" programs.  Then, Obama gave him the head job on his (ineffective) jobs panel.  All this while GE ships more jobs overseas and continues to avoid their "fair share".  Thanks for supporting loopholes for your friends and campaign contributors that screw average Americans over Barry.
Apr 14, 2014 2:06PM
avatar
I just simply do not belief that they pay 37 percent tax.....all they have to do is hire some of GE's accountants. 
Apr 14, 2014 3:31PM
avatar
libs will eventually doom the country.
Apr 14, 2014 2:29PM
avatar

All these companies are global in nature and that's why they are called multinationals. They have one thing dear to them and that is the bottom line profit. For that they will go where it is necessary and they will do what is necessary.


For years, they have used the economy difference between developing nations and developed nations to take advantage and make money by manufacturing at less and selling at high and also by reducing the quality.


Now that they have bled the US economy, they would naturally want to escape the consequences of higher taxation.


We the People, have to start a nationalistic  movement of "BUY AMERICAN", if we want our country to stay ahead. We the people also need to make sure that our government does not sell out to the lobbyists for these corporations. We the people also need to ensure that the government reduces its expenses and hence the taxes so that business is viable. With increase in manufacturing jobs, people who are using the entitlement programs right now will get to earn their income and reduce the burden on the programs.


lets realize one thing that people come in all shapes and forms and intellectual levels and educational levels but they all want jobs. Only keeping the high-tech jobs in the country is not  going to provide jobs to everyone. The category of the jobs should be in this wide range, which should include manufacturing at a higher percentage to keep the maximum population engaged.


Also, manufacturing is the engine of economy that takes components valued at dollar one and creates a product valued at dollar 10, while providing wages to labor. This engine should not stop for any economy. That is what these corporations have stalled in us by minimizing the labor cost first. and then taking the manufacturing out all together. All this done with the help of no other than our administration under one bill or the other.


We the people...it is time to wake up.

Apr 14, 2014 2:43PM
avatar

Absolutely clueless...   Companies VOTE with their feet.   They leave places like Detroit, Illinois, NY, NJ and flee to better BUSINESS climates.   This happens on a global scale as well.   


Maybe we should re-examine our highest in the world corporate taxes?   Maybe we should end the regulatory war on business?   Maybe we should end new crap like Obamacare?  


Or maybe we will just continue to watch as Productive Americans vote with their feet and leave, all the while the parasites will poor into the country...


End the democrats war on business!

Apr 14, 2014 2:13PM
avatar

The Obama Minions have created a hostile environment against "evil Business" and are driving companies headquarters out of the Tax happy states or this country all together.  Look a NY, NJ


We need to vote all of these socialist progressives out of office, and create business friendly places, which will help to hire people into positions of higher salary, not create just "hamburger positions"

Apr 14, 2014 2:16PM
avatar
STOP BSing AROUND and only buy what is made in this country. These companies have been moving their jobs, their money and soon there taxes to any country that will save them money.

This is their right. Remember though corporations are not people and they are not American.

They are muti-national corporations that have no real ties t the US.

If we as consumers do not stop screaming at each other and start paying attention to these corporations our children and grandchildren will be living in a completely service oriented country serving the rich.

BUY AMERICAN NO MATTER WHAT IT COSTS.

If a company wants to act like they could care less about our country then boycott them. Stop spending your money with them. That is the only thing they respond to.



Apr 14, 2014 2:40PM
Apr 14, 2014 1:57PM
avatar
As far as I can tell, the only people who benefit from a company being traded publicly are the shareholders. These greedy bastards don't care about employees or customers. In this situation, they are the ones urging Walgreens to move headquarters. 

Apr 14, 2014 3:28PM
avatar
If you move overseas, don't come back here trying to court consumers. We are paying more attention to who lives here and pays taxes here, and we are committed to Buying American. In the meantime, you might want to explain to your investors what a huge benefit it is to be situated in the U.S., where a mere 37% tax rate gets you a superior justice system, protection of patent and copyright, extensive highways and ports, reliable fuel supply, minimal regulation of permitting and trade, and proximity to your demographic. Business here can move faster and transform itself more quickly than in Europe, where I understand they don't let you fire workers without going to the High Throne of God for permission.
Apr 14, 2014 2:09PM
avatar
the story  reads  the stock holders  want them to  leave  STOCK HOLDERS . not the company stock holders  are americans who are in 401k  ?????  looks  like we are caught up in the  greed  just like  millionaires  and  billionaires . so  if you can not see the real  problem  here   taxes  (government)  stock  market   we are doing it to ourselves 401k was meant to destroy  america .  quit supporting the  market  we are destroying  ourselves . the real  problem  here  is  the rich  might  be to  rich  for us to turn this  around.
Apr 14, 2014 2:51PM
avatar
Make sure they take all their stores with them. 
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

118
118 rated 1
270
270 rated 2
472
472 rated 3
714
714 rated 4
624
624 rated 5
608
608 rated 6
623
623 rated 7
445
445 rated 8
319
319 rated 9
125
125 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
AAPLAPPLE Inc10
ATVIACTIVISION BLIZZARD Inc10
BIDUBAIDU Inc10
BMYBRISTOL-MYERS SQUIBB CO.10
CELGCELGENE CORP10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.