Boots and Sainsbury plan alliance
THE Boots Co Plc is considering a joint venture with
supermarket group J. Sainsbury Plc but has denied that a merger is on
the cards.
Boots has conceded that it is planning a trial of
in-store pharmacies within a small number of Sainsbury stores. An earlier
trial in 10 stores was aborted in August 1998, when Boots decided not
to renew the leases of the pharmacies because they were “not beneficial
to both parties” (PJ, 15 August 1998, p224).
Boots spokesman Francis Thomas said earlier this
week: “We can confirm that The Boots Co and J. Sainsbury have been discussing
the opportunity for a limited number of store-based trials and hope to
be in a position to make an announcement shortly. A merger has not been
part of these discussions.”
Mr Thomas was responding to a report in The Observer
of 8 July, which said that the launch of a joint venture had been postponed
because of information technology problems associated with Boots barcodes.
The tie-up would involve Boots operating in-store pharmacies at large
out-of-town Sainsbury stores. If successful, the arrangement would spread
to other Sainsbury stores and lead to a decision on whether to go for
a merger.
Quoting “well-placed sources”, The Observer
said that, although a merger is a long way off, it is “on the radar screen”
of Sainsbury’s chief executive Sir Peter Davis. A merger would create
a £14bn business able to challenge Tesco as the dominant UK retailer.
The Observer report claimed that over the
past year a relationship had grown between Sir Peter and his opposite
number at Boots Steve Russell. They had been engaged in talks, the newspaper
says, because Boots is looking to sell a number of its high street stores
to the supermarket group.
The Observer story is not the first to claim
that the two companies have been considering a merger. In October 2000,
there was press speculation that Boots had called off secret merger talks
with Sainsbury. Boots denied that it was in talks and said that it had
no plans for any merger.
Back to Top
|
