Boots and Alliance UniChem in £7.5 billion merger talks |
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Published
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Sun, 02 Oct 2005 16:05
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LONDON - High street retailer Boots is in intense talks with rival Alliance UniChem to effect a £7.5 billion merger that would provide it with a platform to launch international ventures.
If the deal does come through, it will be reported to the London Stock Exchange on Monday and will create Britain's biggest pharmacy chain, besides proving to be a strong European presence. The merged entity would operate over 2,600 pharmacies. No job losses are expected to be announced at the moment.
The Financial Times said that this merger would have no effect on the deal to sell Boots Healthcare International (BHI), "Under the terms of the merger, the proceeds of the sale of BHI would be returned to Boots' shareholders and the remaining business would be merged with Alliance UniChem on a 50-50 basis," the paper said. GlaxoSmithKline, Reckitt Benckiser, Bayer, Pfizer, Johnson & Johnson and Novartis are said to be the potential bidders for BHI.
Alliance UniChem happens to be the third largest pharmacy network in Europe. Besides a strong presence in the UK, the group has premier outlets in Norway, the Netherlands and Italy. It is reported that all Alliance stores would be rebranded as Boots, a move that would give the latter a foothold on the continent. However, analysts warned that the deal has to cross some hurdles yet and could prove to be a failure if these are not overcome.
Under the tentative terms of the merger, Richard Baker and Nigel Rudd, the chief executive and chairman of Boots would continue in their posts in the merged entity. Stefano Pessina, who has a 32 percent stake in Alliance, is expected to be a vital link between the two companies. Merrill Lynch and Credit Suisse First Boston are Alliance's advisers in this deal while Goldman Sachs are advisers to Boots in this deal.
Both the companies declined to comment on the merger.
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