Alliance UniChem and Boots announce merger plans
Alliance UniChem and Boots have announced plans to merge into a £7bn
pan-European company to be called Alliance Boots. If approved by shareholders
of both companies, the deal will see the disappearance of the Alliance
Pharmacy chain, with its stores being rebranded as Boots’. No dates
have been set for shareholders’ meetings, but the deal is expected
to be completed in 2006.
Current Boots shareholders will own 50.2 per cent of the new company — described
by the companies as “a merger of equals” — with Alliance
UniChem shareholders owning the rest. Alliance UniChem’s major
shareholder and executive deputy chairman, Stefano Pessina, who owns
approximately 30 per cent of Alliance UniChem shares, will have a 15
per cent stake in the new company and will be its executive deputy chairman.
The merger is a nil-premium deal, with all Alliance UniChem and Boots
shares being replaced by Alliance Boots shares to the same value.
The new company will have annual sales of over £13bn through 3,000
retail outlets — of which just under 2,700 will include a pharmacy — and
a wholesale network supplying 88,000 outlets. In the UK, there will be
2,600 health care outlets, including 1,500 community pharmacies and 800
health and beauty stores, most of which include pharmacies.
An industry source said that the deal was instigated by Mr Pessina, who
first approached Boots five years ago, but was rebuffed. Since then,
Boots’s management has changed and the two sides have decided they
can work together to a shared vision. He did not expect the merger to
affect the business support that UniChem Ltd currently offers its independent
pharmacy wholesale customers, based on the wider company’s experience
running pharmacies through the Alliance Pharmacy chain.
UniChem managing director David Coles said: “I am absolutely confident
that UniChem’s independent customers will share in the future success
of the Alliance Boots group and look forward to the opportunities that
lie ahead.”
Four of the new company’s six executive directors are currently
Alliance UniChem directors, with two — including chief executive
Richard Baker — coming from Boots. Boots chairman Sir Nigel Rudd
will be non-executive chairman of the new board. A further three non-executive
directors are drawn from Alliance UniChem and three from Boots. Another
non-executive director will be appointed after the deal is completed.
Mr Pessina’s aim is to create a global health care company on the
back of the Boots brand, which is known worldwide. Mr Pessina said: “We
at Alliance UniChem have significant experience of acquiring and integrating
health care businesses internationally. The merger creates a platform
to grow both our pharmacy and distribution businesses and enhance our
offering to the independent pharmacist.”
Pradip Patel and Tricia Kennerley, superintendent pharmacists for Boots
The Chemists and Alliance Pharmacy, respectively, declined to say who
would be the new company’s pharmacy superintendent.
Asked whether Alliance Boots might approach the Department of Health
for a pharmacy contract distinct from that agreed by the Pharmaceutical
Services Negotiating Committee, Mr Patel said: “It’s far
too early. Those kinds of questions have still to be discussed and a
conclusion arrived at.”
Tricia Kennerley said: “One thing that we would say is that we
would always remain supportive of a strong community pharmacy sector
across the UK.”
Costs and losses
Cost savings from the merger are expected to reach £100m through
streamlining the combined group’s purchasing, logistics and
wholesale networks and rationalising corporate costs. Job losses
are not expected among the new company’s pharmacists and retail
staff.
The company will have a small, London-based head office for its corporate
functions, with the entire pharmacy operation being managed from
Alliance’s offices in Feltham, Middlesex. (Steve Duncan, Alliance
Pharmacy’s managing director, will be the new company’s
community pharmacy director.) Alliance Boots health and beauty stores
will be managed from Nottingham. UK wholesale management will remain
at Chessington, Surrey. |
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