One of the world’s most successful pharmacy chains has announced that it has purchased a 45 per cent stake in Alliance Boots, in order to become the world’s foremost commercial property chain specialising in health and beauty.
Walgreens has paid a reported £4.3 billion in order to acquire a large share of Alliance Boots’ chain of chemist commercial properties in the UK, as well as more than 3,300 health and beauty stores in 11 countries across the globe.
The combination of the two powerhouses of the pharmaceutical industry has ensured that the partnership now have little in the way of competition from rival commercial property chains. In essence, Alliance Boots and Walgreens now have an unmatched supply chain and procurement expertise, giving them the ability to offer customers who visit their commercial properties innovative solutions and optimal efficiencies due to the level of expertise both companies can bring to the table.
As part of the deal, after three years Walgreens has the option of buying the outstanding 55 per cent stake in the business, costing around $9.5 billion altogether. Walgreens is the bigger company, operating 7,890 pharmacy commercial properties across the United States – yet Alliance Boots would give them a foothold in the as-yet unconquered European market given that Boots is both the biggest seller of health and beauty products, and also a huge internet presence, on the continent.
Gregory Wasson, Walgreens President and CEO, when speaking of the partnership between the commercial property chains said; “At Walgreens, our mission is to be America’s first choice for health and daily living – helping our customers to live well, stay well and get well.
“Today’s announcement represents an exciting opportunity to accelerate our five core strategies and advance that mission – in the U.S. and now internationally.
“We are bringing together the strengths and expertise of each company to create a worldwide healthcare platform for the future that can provide innovative ways to address global health and wellness challenges.”
The deal, which is yet to be approved by industry regulators, will see Walgreens swap more than 83 million shares and pay $4 billion in cash to the board of the privately-held company. It will then effectively have a prominent role in the running of Boots commercial properties in the UK and abroad, as several prominent members of the Board of Directors for Walgreens, including CEO Gregory Wasson, will take up places on the board of Alliance Boots. Similarly, members of the Boots Board of Directors, most prominently Executive Chairman of Alliance Boots Stefano Pessina, will sit on the board for Walgreens.
Mr Wasson added; “We are looking forward to working with Alliance Boots to leverage our combined strengths and provide an even broader range of innovative, cost-effective products and services to patients and customers across the healthcare landscape.
“Together we will be ideally positioned to expand our customer offerings in our existing markets and become the health and wellbeing partner of choice in emerging markets.”
Meanwhile, Alliance Boots Executive Chairman Stefano Pessina echoed Mr Wasson’s enthusiasm for the deal.
He said; “This strategic transaction represents a further vital step in achieving our vision of becoming a global healthcare leader. We believe that it will bring clear benefits to all stakeholders, creating significant and sustainable industrial value through synergies and the deployment of our joint expertise.
“Today’s announcement is testimony to the great track record and accomplishments of the Alliance Healthcare and Boots teams that have delivered strong growth since the creation of Alliance Boots six years ago and its subsequent privatization.
“I strongly believe that this transaction offers further significant growth opportunities and marks a very positive milestone for the healthcare industry as a whole.”
Do you think that the combination of these two groups will prove to be a step forward in the commercial property pharmaceutical industry? Or do you believe that it will simply lead to small, independent commercial property chemists being forced out of business?
