Walgreens collaborates with Goldman Sachs to explore options for the British Boots chain

Five years after acquiring full ownership of the retail pharmacy chain in the UK, Walgreens Boots Alliance is arranging consultants to explore various options including selling Boots.

Goldman Sachs will be required to examine the spin-off of the Boots chain, which was founded by the Methodist family in Nottingham in 1849 and may be sold or listed separately.

Private equity groups have been buyers of British retail assets this year. TDR Capital participated in the acquisition of the supermarket chain Asda in February. Clayton, Dubilier and Rice competed with Softbank-backed Fortress to control another grocery store. Wm Morrison, in October.

Boots is a British listed company until 2007 when it was privatized by Italian pharmaceutical giant Stefano Pessina and private equity group KKR, which was the largest leveraged buyout in the UK at the time.

Walgreens subsequently acquired the company in two phases, Complete the process in 2016, Persina became the CEO of the enlarged group.

Earlier this year, Walgreens appointed Rozbruer As CEO, Persina became executive chairman.Brewer has stated that it will pay more attention to health care in the United States, and the group has Sell ​​its distribution business To Amerisource Bergen.

Chicago-based Walgreens stated that it “announced a series of new priorities and strategic directions” was “accurate.” [in] October, which includes a clearer focus on North America and healthcare”.

But it added that it “does not comment on market speculation” and that Boots is “an important part of the group.”

Sky News first reported that Goldman Sachs has lined up.

Some investors questioned the synergy between Boots and its US parent company because most of these stores are located on different continents and do not have a similar product portfolio.

Critics also stated that Boots has lost its uniqueness under private equity and US ownership, and its stores have become increasingly rudimentary and understaffed.

Neil Saunders of GlobalData stated that the Walgreens merger “does little benefit to Boots” and “lack of investment and attention in areas such as stores and services.”

“Walgreens reduced Boots to its level, which is totally the wrong result.”

But Boots has one of the leading retail loyalty programs in the UK, with more than 14 million active members and a highly defensive pharmacy business. On average, each of its pharmacies can distribute up to 2,000 prescriptions* on behalf of the British National Health Service every week.

Sebastian James, who has been the managing director of Boots since 2018, implemented a plan Close about 200 remaining stores, Enhance its online products, and invest heavily in New style beauty salon Designed to accept department stores.

During the British Covid-related lockdown, Boots also suffered losses. Many of its pharmacies are still open for dispensing, but retail activities (usually accounting for about three-fifths of sales) have declined.

In the year to August 2020, it had an operating loss of 245 million pounds, compared with a profit of 198 million pounds the previous year. Some landlords also criticized their aggressive stance of renegotiating rents.

*This story has been revised since its original publication, stating that each Boots pharmacy distributes an average of 2,000 prescriptions per week, representing the UK’s National Health Service.

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