Walgreens is America's largest drugstore chain by revenues, and also now the leader by store outlets, as a result of a series of regional acquisitions, including the famous Duane Reade drugstore chain in New York, added in 2010. (Competitor CVS/Caremark is bigger by total revenues because of its large pharmacy benefits management division). Walgreens has come to position itself as the "front line" for the delivery of healthcare services in the US, with an expanding networking of in-pharmacy and worksite healthcare clinics, offering diagnosis and treatment for minor ailments. However it also sells a broad range of non-healthcare products, giving it a growing presence in the convenience store segment. In 2012, the group made a big jump into Europe, agreeing to acquire an initial 45% stake in local retailer and wholesaler Alliance Boots. It bought out the remaining shares slightly earlier than expected, at the very end of 2014. A year later, the group unveiled a $17.2bn bid for US rival Rite Aid, that will consolidate Walgreens as the dominant drugstore chain in the US.
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Adbrands Weekly Update 27th Oct 2016: Walgreen Boots Alliance reported solid performance for the year to August, and cheered investors with confirmation that the acquisition of pharmacy chain Rite Aid is on track, but slightly delayed. The group is still in negotiation with regulators for the elimination of crossover stores from the Walgreens and Rite Aid portfolios. Analysts had feared that the regulatory process might derail the merger altogether, but Walgreens said that completion is now expected in 1Q 2017. Revenues for the last year rose 13% to $117.4bn. Comparable net earnings were impacted by exceptional gains in the prior year, dipping marginally to just under $4.2bn. However operating income excluding exceptionals jumped almost 30% to over $6.0bn.
Adbrands Weekly Update 16th Jun 2016: Simon Roberts, group EVP of pharmacy giant Walgreens Boots Alliance and local president of Boots in the UK, has resigned his role " to pursue new opportunities". The chain denied any connection to a Guardian newspaper investigation earlier this year. This alleged that Boots pharmacy managers had been encouraged to boost profits by offering medical health checks to customers who didn't need them (and even to other staff) in order to claim cash rebates from the National Health Service. Boots denied this was the case. Roberts' departure has prompted a full overhaul of group senior management, with EVPs Alex Gourlay and Ornella Barra elevated to co-COOs. Gourlay will continue to oversee the Walgreens and Boots chains, with Barra responsible for global wholesale and group corporate services. Boots' former marketing director Elizabeth Fagan was named as Roberts' effective successor, becoming managing director of Boots. Ken Murphy becomes EVP & group chief commercial officer.
Adbrands Weekly Update 29th Oct 2015: Pharmacy giant Walgreens Boots Alliance is to acquire competitor Rite Aid for $9.4bn, or $17.2bn including the smaller company's debt. Walgreens is already the biggest pharmacy chain in the US, with 8,200 outlets. It also controls the Boots pharmacy business in the UK and other markets, as well as an extensive wholesale business. Main US rival CVS Health has 7,800 stores but is significantly bigger by revenues - almost $140bn last year - as a result of its substantial Caremark prescription management division. The acquisition of Rite Aid's 4,600 drugstores in 31 US states creates a group with around 13,000 outlets (though some overlapping stores may be closed) and combined sales of close to $130bn. Separately, Walgreens Boots reported results for the year to August. Revenues soared 35% to $103.4bn as a result of the consolidation of Alliance Boots, while net earnings more than doubled to $4.2bn.
Adbrands Weekly Update 8th Jan 2015: Walgreens and Alliance Boots completed their merger on the last day on 2014 to create Walgreens Boots Alliance. The resulting business will continue to operate the three separate brands of Walgreens pharmacies in the US, Boots high street pharmacies in the UK (an a few other markets) and the Alliance Healthcare wholesale network. Pro forma consolidated sales for the merged group are around $110bn.
Adbrands Weekly Update 18th Dec 2014: Walgreens' CEO Greg Wasson announced plans to retire following completion of the buyout of the outstanding shares in European pharmacy group Alliance Boots in Feb next year. Instead, the smaller company's chairman and controlling shareholder Stefano Pessina will step up to become interim CEO of the merged group. He will also be the single largest shareholder in the expanded Walgreens Boots Alliance, with 20% of equity, worth around $13bn.
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