| WASHINGTON, June 11
WASHINGTON, June 11 If Walgreen Co were
to relocate its tax home-base to Switzerland, as some of its
investors want, the United States would lose about $4 billion in
tax revenue over five years, activist groups said on Wednesday.
The nation's largest drugstore chain, based in Illinois, is
under pressure from some of its shareholders to do a deal known
as a tax inversion with Alliance Boots Holdings Ltd
that would shift Walgreen's tax domicile overseas.
Two groups issued a report that said such a move would be
seen by many Americans as "deeply unfair and unpatriotic."
"Walgreens should show its commitment to our communities and
our country by staying an American company," said Nell Geiser,
an official at Change to Win, a labor union coalition. The other
group releasing the report was Americans for Tax Fairness, a tax
activist group that gets some of its funding from unions.
The two groups, citing estimates from three Wall Street
investment firms if Walgreen were to do an inversion, said the
move would add up "to more than $4 billion in lost tax revenues
over five years, most of which would likely have been paid in
the United States."
Walgreen, which has more than 8,000 stores, bought a
45-percent stake in Swiss-based rival Alliance Boots in 2012,
with an option to buy the rest in 2015.
Walgreen spokesman James Graham said, "As we've said before,
we continue to analyze a number of issues as we move toward the
window for exercising the second step of our transaction with
Alliance Boots, and we will do what is in the best long-term
interest of our company and its shareholders."
Inversions are still rare transactions, but they are
becoming more common. Of roughly 50 such deals done in the past
25 years by U.S. companies, half have occurred since 2008.
Two recent attempted inversions were scuttled earlier this
year when underlying corporate combinations collapsed for
non-tax reasons. These involved U.S. drugmaker Pfizer Inc
and advertising firm Omnicom Group Inc.
Wall Street investment analysts have said that Walgreen
could lower its tax bill through an inversion.
Proposals to curb these kinds of deals have been offered in
the U.S. Congress and by Democratic President Barack Obama,
though policy analysts expect none of them will become law soon.
Shares in Walgreen closed down less than 1 percent at $74.67
amid broadly lower trading on the New York Stock Exchange.
(Reporting by Kevin Drawbaugh; Editing by Tom Brown)