The largest drug store chain in the US has signed a $6.7bn (£4.3bn) deal to take a 45% stake in Alliance Boots and could have full control of the British high street chain by 2015.
Walgreens, which also trades as Duane Reade, said the partnership with Boots will create the world's largest purchaser of prescription drugs, with 11,000 stores in 12 countries.
The tie-up will combine the Alliance Healthcare, Boots, No7 and Botanics brands with the Walgreens and Duane Reade names.
Walgreens says that the partnership will produce savings of up to $150m (£105m) in the first year.
But Boots, which employs around 75,000 staff in the UK, and Walgreens said they have no plans to make any redundancies because the two businesses complement each other.
They will also continue to operate under their existing brands.
Stefano Pessina, chief executive of Boots, said the deal offers significant growth opportunities and marks "a very positive milestone for the healthcare industry as a whole".
He added that the fit between the two companies was "natural" because Walgreens' profile in the US was similar to its own in the UK, where it operates more than 2,500 stores.
Walgreens said $4bn of the acquisition would be in cash with the rest in shares.