Boots owner WBA pulls £5bn sale of UK pharmacy chain

The US firm moved away from plans to offload Boots after an ‘unexpected and dramatic change’ in the financial markets.

28 June 2022

The US owner of pharmacy chain Boots has pulled its plans to sell the UK retailer.

Walgreens Boots Alliance (WBA) has said it will now keep Boots and the No7 beauty brand under its existing ownership following a strategic review which started in January and saw the group receive a number of takeover approaches.

These reportedly included approaches from suitors such as Indian billionaire Mukesh Ambani, valuing the business at about £5 billion.

The Walgreens merger deal for Boots in 2014 valued the firm at about £9 billion at the time.

The US firm highlighted on Tuesday it had moved away from plans to offload Boots after an “unexpected and dramatic change” in the financial markets.

“As a result of market instability severely impacting financing availability, no third party has been able to make an offer that adequately reflects the high potential value of Boots and No7 Beauty Company,” WBA said.

Rosalind Brewer, chief executive of Walgreens Boots Alliance, said: “We have now completed a thorough review of Boots and No7 Beauty Company, with the outcome reflecting rapidly evolving and challenging financial market conditions beyond our control.

“It is an exciting time for these businesses, which are uniquely positioned to continue to capture future opportunities presented by the growing healthcare and beauty markets.

“The board and I remain confident that Boots and No7 Beauty Company hold strong fundamental value, and longer term, we will stay open to all opportunities to maximise shareholder value for these businesses and across our company.”

The owner said its decision to retain was also supported by strong performances by the brands, which its said “exceeded expectations despite challenging conditions”.

In the second quarter of its financial year, WBA said it was boosted by rebounding sales at Boots as high street footfall recovered following pandemic restrictions.

The group is set to reveal its performance for the latest, three-month period on Thursday.

In an internal email sent to staff seen by the PA news agency, chief operating officer Ornella Barra committed to continued investment in the UK firms.

“As you know, Boots and No7 Beauty Company are very important to me – the fantastic products, the innovation, the care – but most of all, the people.

“Thanks to your ongoing hard work and dedication, both brands are exciting and well-positioned with incredible growth opportunities.

“Since the formation of Walgreens Boots Alliance at the end of 2014, the group has significantly invested in Boots and No7 Beauty Company.

“Given their unmatched assets and unparalleled potential, WBA will continue investing in the future of these two businesses.”

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