A merger between health & beauty retailer, Boots and US pharmacy giant Walgreens sees the latter acquire an initial 45 per cent interest to create the first pharmacy–led, health and wellbeing enterprise it has been announced.
With plans to fully take over in the UK company by investing the rest of the 55 per cent in three years time , Walgreens has fronted a preliminary deal worth $6.7 billion in cash and stock.
An advantageous partnership for both parties, it will make them both global leaders in the health and wellbeing sector with over 11,000 stores in 12 countries.
This venture is set to make Boots the largest purchaser of prescription medicine and will have a wholesale distribution network of over 320 distribution centres delivering to more than 17,000 doctors, health centres, pharmacies and hospitals in 21 countries.
Stefano Pessina, Executive Chairman of Alliance Boots, felt that the forming of the two brands was a good fit as they both carry a strong reputation in their home countries, “This strategic transaction represents a further vital step in achieving our vision of becoming a global healthcare leader.
“We believe that it will bring clear benefits to all stakeholders, creating significant and sustainable industrial value through synergies and the deployment of our joint expertise.
“The fit is natural, Walgreens consumer profile in the U.S. is similar to Boots in the UK in many ways: a trusted and much-loved pharmacy brand with a strong heritage.
“Our pharmaceutical wholesale businesses will provide their logistics know-how to Walgreens and are well placed to be one of the growth engines of the new enterprise.”
This strong converging of the two retailers has been regarded as a fillip for both businesses and will not mean a loss of jobs.
Neil Saunders, Lead Consultant at Conlumino, sees this deal as giving Alliance Boots a positive foothold in the global marketplace, “Overall Boots will gain a wider market reach in terms of wider distribution.
“Overall it is a good deal and much more effective in terms of supplying margins. “Boots position is not under threat.
He concluded, “It will pretty much remain as much as it is.”