CEO Out at Walgreens

Deerfield, Ill. In a surprising announcement, Walgreen Co. Friday said that Jeffrey A. Rein, 56, is retiring as chairman, CEO and a director, effective immediately. Alan G. McNally, 62, lead director of the Walgreens Board, has been named chairman and acting chief executive. McNally previously served as chairman and CEO of Harris Bankcorp and has been a member of the Walgreens Board since 1999.

“We would like to thank Jeff Rein for his many outstanding contributions to Walgreens over the past 26 years and respect his decision to retire," said McNally. "We are confident that our core retail and pharmacy business and growing health and wellness initiatives will drive continued growth and value creation for shareholders."

Industry insiders speculated that Rein’s resignation was related to the chain’s failed attempt to purchase Longs Drug Stores. On Wednesday, Walgreen announced it had withdrawn its bid to acquire the California-based chain. The move cleared the way for arch rival CVS Caremark’s $2.8 billion deal to acquire Longs.

The Walgreens Board has formed a special committee, comprised of William C. Foote, chair of the governance committee, James A. Skinner, chair of the compensation committee, and McNally, to lead a nationwide search for a permanent CEO. It will consider both internal and external candidates.

Walgreens has fiscal 2008 sales of $59 billion. The company operates 6,479 drugstores in 49 states, the District of Columbia and Puerto Rico.