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Walgreens Buys 45% of Boots

By   /   June 20, 2012  /   No Comments

Boots, a staple of the British high street, may soon be under ownership from a different American firm as US giant Walgreens bought out a 45% stake for a reported £4.3 billion. Of this $4 billion is cash, and the remainder Walgreens shares. Given Boot’s dominant position in Europe, in which it finds itself in the position of market leader, this acquisition could deliver the world’s first truly global pharmacist, totalling something in the region of 11,000 shops across 12 different countries.

It was Kohlberg Kravis Roberts (KKR.N), the American private equity giant, which initially purchased the giant in an £11.1 billion takeover back in 2007.

Given the size of this latest development with Alliance Boots, it may well take until 2015 until Walgreens takes full control of the company. Their juncture will result in a company that will deliver to a total of over 170,000 pharmacies, doctors, health centres, hospitals and other health outlets in over 20 nations.

While the synthesis of the two huge megaliths is sure to pose immeasurable problems, there will also be a great deal of potential for the two companies to expand into each other’s distribution networks and utilise economies of scale across the board. Indeed, Walgreen said that it expects to make manifest synergistic gains of anything between $100-150 million in the first year of their synthesis, with gains to top $1 billion by the end of 2016.

While many British commentators have expressed their scepticism of the American firm’s acquisition, Alliance Boots have moved to assure its workers that their jobs remain secure, and that its headquarters and network hub of its operations will remain in Nottingham. This can be put down to the fact that the two firms barely overlap territorially, with Walgreen predominantly in the US market, and Boots, of course, in Europe.

Photograph attributed to: mic.jo’mo / Foter

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