With more than 7,800 stores worldwide, Walgreen Co. (NYSE: WAG) was the sixth largest U.S. retailer, based on 2012 sales of nearly $67 billion. Virtually all those sales came in the United States But the company’s pending buyout of Switzerland-based Alliance Boots chain stands to make Walgreen even bigger, and more international.

It is that international aspect that has some of the company’s largest investors urging the company to re-domicile overseas. The Financial Times reported Sunday evening that an investor group including Goldman Sachs, Jana Partners, Corvex and Och-Ziff met with Walgreen management on Friday to reconsider the company’s refusal to relocate.

Walgreen’s $16 billion acquisition of Alliance Boots is a perfect opportunity to make the move, called an inversion, that would cut Walgreen’s corporate tax rate from its expected U.S. level of 37.5% to the 20% rate now paid by Boots in Europe. That is an increase in earnings per share of 75%. Under U.S. rules, if Walgreen transfers more than 20% of its shares to foreign ownership, it can change its tax status.

The company’s management has been reluctant to make the move due to “perceived political risks,” according to analysts cited by the Financial Times. Pharmaceutical companies have taken advantage of the foreign tax advantages for years, but Walgreen’s management apparently believes it will suffer significant blowback from U.S. consumers, given the current climate regarding offshore holdings by U.S. companies.

A recent study by Moody’s Investors Services found that U.S. companies are sitting on a $1.64 trillion pile of cash and that $947 billion of that is parked offshore in order to avoid U.S. taxes.

In any event, it is not clear that Walgreen would meet the 20% barrier for foreign ownership. Current executive chairman of Alliance Boots, Stefano Pessina, will hold just 16% of Walgreen’s stock if the deal goes through as planned, and it is unclear how many other shares there are in foreign hands. If Walgreen cannot leap over the 20% barrier, then the company’s executives must move to Switzerland. Not like a sentence to Alcatraz, but maybe not something the honchos are willing to do just to appease a handful of shareholders who own around 5% of the company’s stock.

The investor group is looking out for its own best interests, which are purely financial. Walgreen’s management appears to be weighing the possible impact on its business of a move offshore. If such a move were to turn up the political heat on Walgreen, that would not be a good thing. And the move is almost certain to be a public relations disaster and could cause customers to vote with their feet.

Walgreen is just recovering from the temporary loss of its business with pharmacy benefits management company Express Scripts Holding Co. (NASDAQ: ESRX). That was a public relations disaster, and Walgreen can see an offshore move as an even bigger catastrophe.

Shares of Walgreen stock were up about 2.5% at $65.86 in the late morning Monday, in a 52-week range of $43.31 to $69.84.

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