Walgreens seeking new CEO
A search is underway for a new CEO at Walgreens following the resignation of president and CEO Greg Wasson as the retailer moves toward creation of a new holding company ownership structure and complete its largest ever acquisition.
Wasson’s six year run as Walgreens CEO will end shortly after the company’s shareholders vote Dec. 29 on matters to allow the company to acquire the remaining 55 percent of U.K.-based retailer Alliance Boots that the company doesn’t already own and establish a new holding company ownership structure called Walgreens Boots Alliance. Walgreens acquired an initial 45 percent ownership position in Alliance Boots in August 2012 for $4 billion in cash and 83.4 million shares. The new holding company will consist of four divisions; the Walgreen Co., Boots, Pharmaceutical Wholesale and International Retail and Global Brands.
While a search begins for Wasson’s successor, filling the CEO role on an interim basis is Stefano Pessina, Alliance Boots Executive Chairman. He has served on the Walgreens board since 2012 when Walgreens made its initial investment in Alliance Boots. Existing Walgreens chairman James Skinner will become executive chairman of the new Walgreens Boots Alliance holding company, an entity with annual sales of more than $112 billion, nearly 14,000 stores, 370 distributions centers and the leverage of being the world’s largest purchaser of prescription drugs.
“When I became CEO six years ago, I had three goals – to transform the front end of Walgreens drugstores, to advance the role that community pharmacy plays in health care and to find the right partner to take Walgreens global,” Wasson said in a statement announcing his resignation. “With the creation of Walgreens Boots Alliance, it is now time for new leadership to move that vision forward building on the global platform we have created, executing on the company’s many opportunities and creating long-term sustainable value for our customers and shareholders.”
Wasson spent 35 years with Walgreens and was named CEO in 2009. He joined the company in 1980 as a pharmacy intern and went on to hold numerous positions of increasing responsibility.
“I could not be more proud of our company or more grateful for the opportunities I have had to work with so many incredible people since joining Walgreens over 35 years ago, and I am committed to doing my best to achieve the smoothest possible leadership transition,” Wasson said.
“The completion of the merger between Walgreens and Alliance Boots and the establishment of the first global pharmacy-led, health and wellbeing enterprise, are a fitting tribute to Greg’s exceptional leadership and legacy at Walgreens,” Pessina said. “Through his strategic vision, Greg has done more than transform an iconic company – he has truly helped to change an entire industry for generations to come. I look forward to working with James Skinner and all the leaders of the future enterprise when we launch the combined group.”
That’s when the heavy lifting really begins as Walgreens and Alliance Boots begins to integrate their operations to achieve synergies and market development opportunities at the root of the deal. Guidance Walgreens shared in August have the combined companies in fiscal year 2016 generating revenues between $126 billion and $130 billion and earnings per share of $4.25 to $4.60. The profit assumptions are based on realizing $1 billion in is savings driven by the acceleration of cost reduction initiatives it will fall upon the company’s new CEO to execute.