Walgreens nears deal to buy British pharmacy, but won’t invert

August 5, 2014, 11:03 PM UTC
Inside A Walgreen Co. Store Ahead Of Earns
Cars sit parked outside of a Walgreen Co. store in Oak Park, Illinois, U.S., on Tuesday, Dec. 20, 2011. Walgreen Co. is scheduled to release earnings data on Dec. 21. Photographer: Daniel Acker/Bloomberg via Getty Images
Daniel Acker/Bloomberg/Getty

Walgreens had toyed with the idea of moving abroad, officially at least, to save on taxes as part of a complicated plan that involved acquiring all of British pharmacy Alliance Boots. But after a storm of criticism, the chain store has had a change of heart.

Walgreens is close to buying a 55% stake in its British counterpart that it doesn’t already own, according to an anonymous source cited by The New York Times. But the company will keep its U.S. citizenship, the report said.

It’s a rare victory for critics of what are known as inversions, essentially a tax loophole that allows companies to nominally move overseas to save on taxes. In the process, the U.S. loses out on billions in taxes. Some have called the strategy unpatriotic. President Obama recently weighed in with scathing remarks about companies that move their headquarters to avoid U.S. taxes.

In June, Walgreen CEO Gregory Wasson noted the possibility of the company moving abroad, especially while facing increasing pressure from investors over the last few months, according to The Times. After news broke on Tuesday afternoon, shares of Walgreen (WAG) fell 4%.