Walgreen Company (NYSE:WAG), the biggest U.S. drugstore chain, said Wednesday that it would pay about $5.27 billion in cash, plus shares, to acquire the remaining 55% of Alliance Boots it does not already own, and will retain its headquarters in the United States.

Walgreen

The new holding company will be called Walgreens Boots Alliance, Inc. and anticipates achieving $1 billion in cost savings by fiscal 2017.

Three-year option to acquire Boots

As reported earlier, Walgreen Company (NYSE:WAG) took a 45% stake in Britain’s biggest pharmacy chain Alliance Boots in 2012 and had a three year-option to acquire the rest of the company. The U.S. drugstore major paid about $6.7 billion for its initial stake two years ago.

Earlier this year, a group of shareholders that represent around 5% of Walgreen Company (NYSE:WAG) said they were hoping that Walgreen’s 45% ownership stake in Swiss-based Alliance Boots GmbH would enable the company to move its legal base to Europe.

However, Walgreen Company (NYSE:WAG) has repeatedly stated that it’s happy with its Illinois home and doesn’t wish to alienate customers with an overseas move.

Walgreen shuns inversion

In terms of the deal announced Wednesday, Walgreen Company (NYSE:WAG) would pay 3.13 billion pounds, or about $5.27 billion, in cash and about 144.3 million shares of Walgreens to acquire the 55% of Alliance Boots it didn’t own from other owners. They include Kohlberg Kravis Roberts and the Italian billionaire Stefano Pessina, the Alliance Boots executive chairman.

The new holding company, which will be based in the Chicago area, will operate about 11,000 stores in 10 countries.

In a news release, Gregory D. Wasson, Walgreen Company (NYSE:WAG)’s president and chief executive said: “The company concluded that it wasn’t in the best long-term interest of our shareholders to attempt re-domicile outside the U.S.”

Tax inversions have become popular with a variety of American companies in recent years, particularly in the pharmaceutical sector. Tax inversions facilitate U.S. companies in paying lower tax rates by setting up offices in a country with lower tax rates. However, such maneuvers have come under criticism recently, and Senate Democrats are trying to close the tax loophole.

According to the Congressional Research Service analysis, a record number of companies have gone overseas this year in search of tax advantages, with nearly 50 moving abroad in the first half of 2014, up from only 29 in the previous two decades.