December 12th 2024.
Boots, the largest pharmacy chain in Britain, may soon be getting the boot off British high streets. After being acquired by American company Walgreens Boots Alliance in 2014, Boots is now reportedly in takeover talks with US private equity giant Sycamore Partners. However, it seems that Sycamore is looking to have separate ownership of Boots, potentially putting the 175-year-old brand up for auction.
This news comes after troubled Wallgreens announced last year that it would be closing 650 branches in order to save approximately £618 million. With around 52,000 employees, including 4,300 pharmacists, and over 2,100 stores, Boots is a familiar and convenient presence for nearly nine in 10 Britons who are always within a 10-minute radius of a Boots store.
The proposed deal could mean that Boots is valued at just under £8 billion, as reported by The Wall Street Journal. It is worth noting that Walgreens Boots Alliance is a publicly traded company, meaning it is owned by shareholders, and has seen its shares decrease significantly over the past decade. This potential deal with Sycamore would make Wallgreens a private company and no longer listed on stock exchanges. This news has caused shares of the pharmaceutical powerhouse to surge by 20%.
It is expected that Sycamore will not purchase Wallgreens in its entirety, but rather the billionaire chairman and largest shareholder of Walgreens, Stefano Pessina, who owns a 17% stake in Boots, will play a major role in the future of the pharmacy chain. Regardless of who ends up buying Boots, it is likely that they will continue to run it as a separate British firm rather than incorporating it into their American family.
This potential takeover by Sycamore is just the latest development in Walgreens' years of deliberation about the future of Boots. In 2022, the company attempted to sell Boots for £7 billion, and considered doing so again earlier this year. However, these ideas and sales never came to fruition due to changes in strategy and undervaluation of the retailer.
In the midst of years of austerity, a global pandemic, and a crisis in the cost of living, it has been a challenging time for high street retailers like Boots. As one columnist asked in 2013, "Is the death of the high street inevitable?" Sadly, it seems that it might be, with approximately 38 shops closing every day in the UK and nearly 7,000 shutting down in just the first half of this year.
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