Feb 21 (Reuters) - Shares of Walgreens Boots Alliance fell 3% in premarket trading on Wednesday after the U.S. pharmacy chain operator lost its spot on the Dow Jones Industrial Average to Amazon, after nearly three years on the blue-chip stock index.

The replacement comes less than two months after Walgreens nearly halved its dividend payout to conserve cash as it seeks to win back market share from rivals and expand beyond its pharmacies.

The switch was prompted by Walmart's decision to split its shares, which would reduce the retailer's weightage on the index.

Walgreens joined the Dow in 2018, replacing industrial conglomerate General Electric and becoming one of the five healthcare companies on the elite 30-consituent index. Since then, the stock has lost about 65% of its value.

The company has appointed new top executives, shut unprofitable stores and unveiled the dividend cut in January as it deals with low consumer spending, a drop in COVID-19 product sales and a slow ramp-up of its nascent healthcare unit.

The stock has posted a decline in seven of the past eight years and is down nearly 15% since the beginning of 2024. Shares of Walgreens trade at a forward price-to-earnings ratio of 6.54, compared with 9 for larger rival CVS Health.

S&P Dow Jones indices said late on Tuesday that adding Amazon would also increase consumer retail exposure, reflecting "the evolving nature of the American economy". The change is effective next week, it said.

Besides dominating online retail, the Seattle-based company is a major player in cloud computing, entertainment and other industries.

Amazon's shares rose 1.1% before the bell.

(Reporting by Manas Mishra in Bengaluru; Editing by Shilpi Majumdar)