Walgreens Co. will complete its merger with Alliance Boots, a British pharmacy, but it will not move its headquarters overseas to reduce its U.S. tax bill.
Walgreens will pay $15 billion, including $5 billion in cash, to purchase the remaining 55 percent of Alliance Boots. The two companies began merging in 2012.
Walgreens had flirted with the idea of moving its headquarters from Chicago to the United Kingdom to avoid paying corporate taxes in the U.S.
That drew attention from policymakers who are concerned about profits made in America being taxed overseas, if at all.
On Tuesday, Treasury Secretary Jack Lew told The New York Times that the Obama administration was exploring ways of cracking down on the process, known as inversion, without legislation from Congress.
Such an inversion would not have flown under the terms of Walgreens' deal with the British retailer. Walgreens decided to drop the idea.
"The company concluded it was not in the best, long-term interest of our shareholders to attempt to re-domicile outside the U.S.," Walgreens CEO Greg Wasson said in a statement.
Investors seemed to disagree. The company's share price dropped about 15 percent on Wednesday.