Boots has struck a £4.8bn deal with Legal & General in which liabilities for its pension scheme will be switched to the insurance firm.
The buy-in insures all 53,000 members in the Boots Pension Scheme, making it the largest single transaction of its kind.
The new deal is said to be a precursor to owner Walgreens Boots Alliance reinitiating a sale of Boots after its abandoned process last year.
The health and beauty retailer said it had explored all options for the pension scheme but concluded that the transaction with Legal & General was the best way to safeguard members’ benefits against market uncertainty, improved life expectancies, and other risks.
Subscribe to Retail Gazette for free
Sign up here to get the latest news straight into your inbox each morning
Boots senior vice president and managing director Sebastian James said: “We are very pleased to have achieved the gold standard outcome for our pension scheme and to have fully secured the benefits of all members with a highly respected insurer. This will provide greater certainty to both the scheme members and to Boots, and is an excellent outcome for both parties.”
Alan Baker on behalf of Law Debenture, as chair of trustee, Boots Pension Scheme, said: “This agreement with Legal & General gives added protection to our members’ long-term benefits by removing market uncertainty and other financial exposures.”
Earlier this year, Boots announced plans to close 300 UK stores over the next 12 months as it sought to “consolidate” the business.
Click here to sign up to Retail Gazette‘s free daily email newsletter
