Partner Article

Walgreen buys 45% stake in Boots

American retail giant Walgreen is set to pay £4.5 billion for a 45% stake in UK rival Alliance Boots, cementing its position as the world’s biggest pharmacy chain.

Alliance Boots has a chain of over 3,300 health and beauty stores in 11 countries worldwide, while the company’s wholesale business supplies pharmacies and doctors in 21 countries.

The firm also have the option to buy the outstanding Boots shares by 2015, valuing the company at a total of $9.5 billion.

Walgreen operates 7,890 pharmacies across the US. While Boots is smaller than its American rival, it is Europe’s biggest seller of health and well-being products and has strong internet sales.

The firm is now set to pay $4 billion in cast for Boots, as well as swapping 83 million shares for their stake.

While the deal has yet to be approved by industry regulators, Walgreen still made the decision to raise its dividend payment from 22.5 cents to 27.5 cents as a sweetener to shareholders.

The announcement also coincided with the release of Walgreen’s earnings for the three months to the end of May. Net profits was down 11% on the same period last year to $537 million. However, if the deal with Boots its competed this should boost earnings in the first year.

This was posted in Bdaily's Members' News section by Ruth Mitchell .