SHAREHOLDER ALERT: Pomerantz Law Firm Announces the Filing of a Class Action Against Walgreen Co. and Certain Officers -- WAG

New York, New York, UNITED STATES

NEW YORK, April 14, 2015 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against Walgreen Co. (“Walgreen” or the “Company”) (NYSE:WAG) and certain of its officers. The class action, filed in United States District Court, Northern District of Illinois, Eastern Division, is on behalf of a class consisting of all persons or entities who purchased Walgreen securities between March 25, 2014 and August 5, 2014 inclusive (the “Class Period”). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934 (the “Exchange Act”). 

If you are a shareholder who purchased Walgreen securities during the Class Period, you have until June 9, 2015 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at To discuss this action, contact Robert S. Willoughby at or 888.476.6529 (or 888.4-POMLAW), toll free, x237. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.

Walgreens operates as a retail drugstore chain in the United States. The Company sells prescription and non-prescription drugs and general merchandise through its Walgreens drug stores. As part of a corporate reorganization completed in connection with its acquisition of Alliance Boots on December 31, 2014, Walgreens became a wholly owned subsidiary of Walgreen Boots Alliance (“WBA”), a global pharmacy-led health and wellbeing commercial enterprise headquartered in Deerfield, Illinois.

The Complaint alleges that throughout the Class Period, defendants issued false and misleading statements and/or failed to disclose adverse information regarding Walgreens' business and prospects, including the purported benefits of Walgreens' strategic partnership with Alliance Boots GmbH.  Specifically, defendants publicly announced goals for fiscal year 2016 of $1 billion in combined synergies and $9 to $9.5 billion in adjusted earnings before interest and taxes ("EBIT") for the combined entity, but concealed a $1.8 to $2.3 billion fiscal year 2016 earnings shortfall and the reasons for the shortfall from the investing public. As a result of defendants' false and misleading statements and/or omissions during the Class Period, the price of Walgreens stock traded at artificially inflated prices, reaching a high of $76.08 per share.

On June 19, 2012, Walgreens announced that it had entered into a strategic partnership with Alliance Boots GmbH (“Alliance Boots”) to create a global pharmacy-led health and wellbeing enterprise (the “Walgreen-Alliance Boots Transaction”).

Defendants heralded the partnership as providing an unmatched supply chain, an unparalleled portfolio of health and wellness brands, and a unique platform in developed and emerging markets. The deal would occur in two parts. Under “Step One,” which took place in 2012, Walgreens acquired a 45% equity ownership stake in Alliance Boots in exchange for approximately $6.7 billion in cash and stock. Under “Step Two,” Walgreens acquired the remaining 55% on December 31, 2014 for approximately $5.3 billion in cash and 144.3 million shares of Walgreens’ common stock. Significantly, whereas the first step of the transaction did not require a shareholder vote, the second step did require shareholder approval.

In August 2012, after Step One of the Walgreen-Alliance Boots Transaction closed, the Company provided a set of publicly announced goals for fiscal year 2016 (“FY 2016 Goals”).  Defendants spoke about the benefits of the partnership and the FY 2016 Goals became critically important metrics that were regularly discussed by the Company and followed by analysts because they quantified the purported benefits of the merger and were important to assessing the merits of voting in favor of Step Two of the merger. The goals included $1 billion in combined synergies and $9 to $9.5 billion in adjusted earnings before interest and taxes (“EBIT”).

On August 6, 2014, Walgreens and Alliance Boots hosted an investor call. During the call, Gregory Wasson (“Wasson”), Walgreens former Chief Executive Officer, and Walgreens bundled the disclosure of the new FY 2016 EBIT goal, which finally revealed the amount of the massive shortfall that had been concealed during the Class Period and that the purported benefits of the merger were not nearly as robust as represented, with numerous optimistic statements.

Wasson disclosed that the Company was now tracking to a “mid-point” of $7.2 billion for FY 2016 EBIT, stating “we’re not happy about lowering our previous goals.” Wasson claimed “we have been challenged by the ongoing global pharmacy reimbursement pressure, which continues, and the rapid and pronounced increase in generic drug pricing, which we did not fully anticipate, and now expect to persist longer than we anticipated.” Wasson also finally disclosed the reason for the shortfall, stating that Walgreens had not been “able to fully mitigate [generic inflation] given the structure of certain existing contracts.”

On August 7, 2014, Cowen and Company reported that because the updated $7.2 billion EBIT estimate included a new $1 billion in cost savings that were additive to the previously disclosed $1 billion in synergies, Walgreens’ base business would be declining at a negative 4% CAGR over the next two years. This was far below the initial forecast of $9 to $9.5 billion back in August 2012 that appeared to be based on a positive CAGR. In addition, Cowen commented that “[m]anagement’s focus on the call around increased reimbursement pressures and generic inflation is a bit confusing to us, given this is not a new issue and shouldn’t come as such a surprise,” adding that “everyone has known about the issues of generic inflation” and “other players in the space have been able to more than compensate for these issues.”

After these disclosures, the Company’s stock price plummeted, dropping from a close of $69.12 per share on August 5, 2014 to a close of $59.21 per share on August 6, 2014, losing more than 14% of the value of the share price.

The Pomerantz Firm, with offices in New York, Chicago, Florida, and San Diego, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See


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