(Reuters) - Walgreen Co said Chief Executive Greg Wasson would retire and hand the reins on an interim basis to the head of Alliance Boots Holdings Ltd, a move that follows a series of events that has tested investor confidence in the U.S. drugstore chain.
Walgreen said Wasson would step down shortly after it completes the purchase of the 55 percent it does not already own in Alliance Boots, one of Europe’s leading pharmacy retailers. The deal, valued at $15 billion, is up for a shareholder vote on Dec. 29.
Stefano Pessina, executive chairman of Alliance Boots, will serve as acting CEO during the search for a permanent replacement, Walgreen said in a statement. Chairman James Kinner is slated to become executive chairman of the merged company.
The moves follow a series of events that have rattled investors, including the company’s retreat from a controversial plan to move its tax domicile overseas and a surprise $1 billion forecasting error that led its former CFO to sue the firm.
Under Wasson, who became CEO in 2009, the company has struggled to boost earnings amid intense pricing pressure from insurers and drugmakers, said Morningstar analyst Vishnu Lekraj.
“Given the strategic missteps of the firm and the pressure it is facing from an operational standpoint, from suppliers and customers, it’s not a surprise to see turnover in the CEO chair,” he said.
Walgreen said Wasson, a 35-year company veteran, had successfully navigated the tough economic times after the financial crisis and had unearthed growth opportunities, such as leading its acquisition of Duane Reade in 2010.
But the company has recently been through a rough patch.
Following fierce criticism of so-called tax inversion deals, the company in August dropped a plan to move its tax domicile overseas with the Alliance Boots acquisition. The cost-saving move had been promoted by some big investors.
The company has also had to deal with the fallout from a $1 billion forecast revision, which reportedly led to the departure of CFO Wade Miquelon.
Miquelon has since sued the company for defamation.
Last month labor pension adviser CtW Investment Group said it had asked the Securities and Exchange Commission to probe whether Miquelon’s claims showed violations of securities rules, one in a series of complaints it has brought to the regulatory agency.
Company spokesman Michael Polzin said Wasson’s retiring was unrelated to the Miquelon case.