Alliance Boots merger completed; company confident of cost savings |
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Mon, 31 Jul 2006 13:00
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LONDON - Alliance Boots, the newly merged company announced today that trading in two of its core businesses was in line with expectations and hence it expected to save costs, which were previously anticipated. The group was formed by the £7 billion merger between Boots Group and Alliance UniChem.
"Looking ahead our immediate focus is to commence the delivery of the identified cost synergies of at least £100m per annum by the fourth full year," said Richard Baker, chief executive of Alliance Boots. "The first stage of this work has already started and we are confident of delivering £60m of annualized savings by the end of the second year,” The new group is listed in London with a market capitalization of £3.92 billion.
The merged group also reported the final trading update as separate entities. Boots posted a 3 percent jump in like-for-like sales in the three months ending June 30. Alliance UniChem reported that revenues increased 2 percent to £4.72 billion. The company also added that operating profits were up 11 percent to £135.8 million over a six-month period.
“I am delighted that we are able to announce the completion of the merger between Alliance UniChem and Boots to create Europe’s foremost international pharmacy-led health and beauty group," Baker said. “The union of these two great businesses also establishes a new market leader in UK pharmacy and provides exciting opportunities for international growth.” He added that the priority at the moment was to keep business as usual and not rush into anything new.
"It is not as though we have to go off in a mad dash and do anything with our formats that is very different from what we do today," said Baker. "Over time we will optimize our pharmacy operating model but not in a big-bang, radical, high-risk way."
Alliance Boots shares dipped 1.2 percent at 797 pence in early trading.
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OFT gives conditional approval for Boots' acquisition of Alliance UniChem 