Walgreens CEO Wasson To Retire After Alliance Boots Deal Closes

(RTTNews) - Drugstore chain Walgreen Co. (WAG) said Wednesday that Greg Wasson, president and chief executive officer of the company, will retire after the close of Walgreens' merger with Switzerland-based Alliance Boots GmbH. The announcement marks a reversal from Walgreens' announcement in August that Wasson would be president and CEO of the combined company.

Deerfield, Illinois-based Walgreens, which already owns a 45 percent stake in Alliance Boots, said that Watson has informed the company's board of directors that he will retire shortly after the close of the second step of the Alliance Boots transaction, on which shareholders are scheduled to vote on December 29, 2014.

Following the transaction close and Wasson's retirement, Stefano Pessina, executive chairman of Alliance Boots and a member of the Walgreens board of directors, will serve as acting CEO of Walgreens Boots Alliance, pending a board search for a successor.

Pessina got a 7.6 percent stake in Walgreens after the company's acquisition of a 45 percent stake in Alliance Boots. Following the completion of the merger valued at about $15 billion, he would be the largest shareholder of the combined company.

Walgreens Chairman James Skinner will become the executive chairman of Walgreens Boots Alliance. In addition, William Foote will serve as the lead independent director of the Walgreens Boots Alliance board of directors.

In August, Walgreens said it will seek shareholder approval in connection with acquisition of the remaining 55 percent stake in Alliance Boots that it does not already own. Walgreens said at that time that the combined company will have Wasson as president and CEO, and Pessina as executive vice chairman.

Commenting on his decision to retire, Wasson said, "When I became CEO six years ago, I had three goals - to transform the front end of Walgreens drugstores, to advance the role that community pharmacy plays in health care and to find the right partner to take Walgreens global. With the creation of Walgreens Boots Alliance, it is now time for new leadership to move that vision forward building on the global platform we have created, executing on the company's many opportunities and creating long-term sustainable value for our customers and shareholders."

Wasson joined Walgreens in 1980 as a pharmacy intern while still at Purdue University's School of Pharmacy. Over the years, he moved from managing pharmacies in Houston to become regional vice president of store operations.

Later, he took on various executive roles in the Walgreens Health Initiatives division, leading to his promotion to chief operating officer and ultimately to chief executive officer. On becoming CEO, Wasson focused on tackling retail pharmacy's challenges and launched "Walgreens Plan to Win," a blueprint designed to revive Walgreens.

In 2010, Wasson led the company's acquisition of Duane Reade. In 2012, he identified the opportunity to begin the process of the strategic partnership with Alliance Boots. In addition to Walgreens, Wasson is on the boards of Alliance Boots, AmerisourceBergen and Verizon.

In August, Walgreens said it exercised its option to complete the second step of its strategic transaction with Alliance Boots, ahead of the original option period that was between February and August 2015. The transaction would fully combine both the companies to form the first global pharmacy-led, health and wellbeing enterprise.

This follows the launch of the companies' long-term strategic partnership in June 2012, when Walgreens purchased a 45 percent stake in Alliance Boots, with the option to proceed to a full combination by acquiring the remaining 55 percent of Alliance Boots in three years' time. Walgreens plans to complete the transaction in the first quarter of calendar 2015.

In relation with moving forward with the second step of the transaction, Walgreens said that a new holding company to be formed in connection with the transaction would be named Walgreens Boots Alliance, Inc. The company would include 4 divisions - Walgreen Co.; Boots; Pharmaceutical Wholesale and International Retail; and Global Brands.

WAG closed Wednesday's trading at $68.15, down $0.44 or 0.64 percent on a volume of 5.99 million shares. However, in after-hours, the stock gained $1.20 or 1.76 percent to $69.50.