US retailer Walgreens is to take full control of Boots the Chemist owner Alliance Boots after announcing a £9 billion cash and shares deal to swallow up the 55% of the company it does not already own.
The new group, Walgreen Boots Alliance, will be based in Chicago but the headquarters of Boots will remain in Nottingham.
Walgreens said a programme of cost-cutting would target one billion US dollars (£594 million) in savings by 2017.
Alliance Boots employs more than 108,000 staff in more than 25 countries, including 70,000 in the UK, where Boots has nearly 2,500 stores.
Walgreens bought a 45% stake in Alliance Boots for 6.7 billion US dollars (£4 billion) in 2012, with the option to buy the rest by August 2015.
But today's announcement means it will complete its take-up of the 55% remainder by February, in exchange for just over £3 billion in cash plus 144.3 million shares - with a value of just under £6 billion.
It brings the total value of the deal to around £9 billion, meaning Walgreens has spent about £13 billion acquiring Alliance Boots - which comprises both Boots the Chemist and pharmaceuticals distribution arm Alliance.
The latest transaction will reportedly net a £1.5 billion windfall for executive chairman Stefano Pessina, who took Alliance Boots private, with private equity firm KKR, in an £11.1 billion deal in 2007.
Walgreens said it had rejected the option of moving its corporate headquarters out of the US in an "inversion" strategy to reduce its tax bill.
The move would have echoed the strategy mooted by drugs firm Pfizer as part of its failed attempt to buy Britain's AstraZeneca, but Walgreens concluded it would not have been in the best interests of shareholders.
An extensive analysis found that despite financial benefits there were doubts over whether the switch would have been given the green light by US tax authorities.
It also considered the US public reaction to such a move by an "iconic American consumer retail company".
Walgreens said the merger would create a global leader in "pharmacy-led health and well-being retail" with more than 11,000 stores in 10 countries. It already has more than 8,500 locations in the US - where it also trades as Duane Reade.
The deal would also create the world's largest pharmaceutical wholesale and distribution network, with more than 370 centres delivering to more than 180,000 pharmacies, doctors, health centres and hospitals in 20 countries.
Mr Pessina, who will become executive vice chairman, said: "The expected creation of the new enterprise will represent the most significant milestone in the history of Alliance Boots and, importantly, a very positive step for the healthcare industry as a whole."
Chief executive Greg Wasson said: "This is a pivotal moment in Walgreens history as we venture ahead from the best corners in America to the four corners of the world."
The company is targeting revenue of 126 billion US dollars (£75 billion) to 130 billion US dollars (£77 billion) for 2016.
Mr Wasson said: "As we launch our global plan, we are more focused than ever on what it will take to compete and succeed on the world stage.
"We are uniquely positioned to be a leader and a champion for accessible, affordable healthcare, and that means continuing to innovate, to find new ways to be as efficient as possible, and more agile and nimble as we compete in the worldwide market."
It said its three-year cost-cutting plan would include savings at "corporate, field and store level".
Mr Wasson said this year Walgreens had seen "strategic closures" of certain distribution centres and stores, as well as exiting certain businesses and trimming costs at headquarters and "in the field".
He added: "We also plan to expand these efforts as we leverage the expertise of both companies and move forward integrating Walgreens and Alliance Boots."
Alliance Boots traces its roots back to 1849 when John Boot opened his first store selling herbal remedies in Goose Gate, Nottingham. It opened its 1,000th store in 1933 followed by the No7 cosmetics range two years later.
Boots Group merged with Alliance UniChem to form Alliance Boots in 2006 before it was taken private in Europe's largest leveraged buyout a year later.