The two biggest pharmacy chains in Europe and the US have merged, thus creating a massive worldwide health and beauty chain of over eleven thousand shops. The £4.3 billion merger is between Walgreen and Alliance Boots. Walgreen now have a 45 percent stake in Alliance Boots, owners of Boots the Chemist.
Walgreen is the biggest pharmacy company in the USA and Alliance Boots is Europe’s biggest. Walgreen’s head offices are based in Deerfield, Illinois and trade as Walgreens and Duane Reade. Alliance Boots have offices all over Europe including the headquarters of Boots the Chemists in Nottingham.
Walgreen will initially buy 45 percent of Alliance Boots but it also has the option to buy complete control within three years. The Alliance Boots company is valued at $16.2 billion dollars, going on the current Walgreen share price. The merger should give $1 billion savings by 2016 but there are not expected to be any job losses.
It was in 2007 that Alliance Boots went private backed by the private equity firm KKR. This was in a deal worth £12.4 billion. The Italian billionaire, Stefano Pessina, co-owns Alliance Boots with KKR. He said that this latest merger was a natural fit. He said that both companies have similar customer profiles and that they are very much loved and trusted brand names with strong heritages.
Pessina had said at the announcement of the annual results, earlier in the year, that he would prefer another merger over a fresh stock exchange listing. He said that partnerships gave business synergies. He added that the Alliance Boots’ pharmaceutical wholesale business will add the logistics knowledge to Walgreens and that they are in the ideal position to be one of the main growth components of the new business.