Walgreens Will Remain Headquartered in US After Planning Move Outside of the Country to Avoid Taxes One of America's biggest corporate names is poised to bow to intense US political pressure by retaining its headquarters in the US even as it secures a full takeover of Boots, Britain's biggest pharmacy chain. Sky News can exclusively reveal that Walgreens, the giant drug-stores group, will announce as soon as today that it plans to acquire the remaining 55% of Alliance Boots that it does not already own in a deal costing in the region of £5bn. However, sources on both sides of the Atlantic said that Walgreens is likely to disclose as part of its announcement that it intends to remain a US-domiciled company rather than pursuing a so-called tax inversion which would involve moving its corporate headquarters to the UK or Switzerland. The news will represent a significant victory for President Obama, who said recently that US companies which moved their headquarters overseas to save tax were damaging the country’s economy. "My attitude is I don't care if it's legal, it's wrong," he said in July.
Since learning that Walgreens may move its headquarters overseas, we’ve heard most from its shareholders, its executives, and politicians in Illinois and Washington. We haven’t heard much from the general public, much of which is still struggling economically in the wake of the recession and all of which stands to lose out when US corporations dodge taxes. Walgreens, if we let it, will become the latest in a string of companies to exploit an accounting trick called “inversion,” which will allow the company to move its corporate address to a known tax haven. It will also become inversion’s most shameless exploiter: nearly a quarter of the company’s revenues come from Medicare and Medicaid, and its profits soared by 68 percent when Obamacare brought it new customers last quarter. Yet, Walgreens may decide as soon as August to renounce its “corporate citizenship,” become Swiss only in name, and slash its tax rate from 31 percent to 20 percent. The push for inversion comes from a minority of Walgreens’s shareholders. This is a minority accustomed to outsize power over shareholders and stakeholders alike: Goldman Sachs, three activist hedge funds, and the executive chairman of Alliance Boots, the Swiss firm that Walgreens must acquire to complete its inversion. The camp pushing to decamp offers tax evasion as a route to shareholder profit. This offer may sway the shareholder majority, but Walgreens’ stakeholders stand to lose big time.