UPDATE 1-Walgreen to stay in US after buying Alliance Boots-Sky News

Tue Aug 5, 2014 3:47pm EDT

(Adds details, background, share move)

Aug 5 (Reuters) - U.S. pharmacy chain Walgreen Co will remain headquartered in the United States, spurning the chance of a so-called tax-inversion, after it buys the rest of European drug chain Alliance Boots, Sky News reported on Tuesday.

The broadcaster, citing sources close to the deal, said Walgreen will announce as soon as Wednesday that it will buy the 55 percent of Alliance Boots that it does not already own for about 5 billion pounds ($8.4 billion).(bit.ly/1s8OOku)

Walgreen has been under pressure from some shareholders to move its domicile to the UK or Switzerland, where corporate taxes are lower than in the United States.

The company's stock was down 5.8 percent at $67.98 late afternoon trading on the New York Stock Exchange.

A Walgreen spokeswoman said she had not seen the Sky report and was unable to comment. An Alliance Boots spokeswoman declined to comment.

Sky News said Walgreen plans to buy the rest of privately owned Alliance Boots next year during a previously agreed window of between February and August.

Walgreen bought 45 percent of Alliance Boots in 2012.

A sharp upswing in inversion deals has caused alarm in Washington.

Three prominent Democratic senators on Tuesday urged President Barack Obama to use his executive authority to reduce or eliminate tax breaks for companies that shift their headquarters overseas to cut their U.S. tax bills. ($1 = 0.5925 British pounds) (Reporting by Ramkumar Iyer in Bangalore; Editing by Maju Samuel and Ted Kerr)