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What do you make of the Boots UK sale rumours?

Started 9 months ago

With the news that Boots' parent company is rumoured to be "exploring" the sale of its pharmacies in the UK - according to Sky News - what impact could this have on the UK pharmacy market?


Read C+D's story and share your thoughts: https://www.chemistanddruggist.co.uk/CD135763/Boots-parent-company-rumoured-to-be-exploring-selling-off-UK-pharmacies

My first thought is that since leaving the EU, this has made it either more expensive to do business in the UK; or the access to the EU market is no longer viable through the UK; or the incoming Amazonisation, and death of the high street expedited by the pandemic is a very real threat that needs to be addressed sooner rather than later.

It’s obvious what the owners are doing. Short term gains rather long term growth. Like it or not they are striping valuable assets (sale of Alliance Hc) from Boots for quick gains of cash to keep their stakeholders happy.

Not having their own wholesale/distribution business means they will less their competitive edge as they won’t benefit as much from economies of scale of purchased medicines when their 10 year deal lapses.

I bet Walgreens will dump Boots before the 10 years is up and by then Boots will be a shell of its former self.

Latest development in the rumoured Boots UK sale - two private equity firms said to be in the running: https://www.chemistanddruggist.co.uk/CD135828/Two-investment-firms-in-rumoured-joint-bid-for-Boots-UK-as-multiple-confirms-business-review

Do you work for Boots? Are you concerned by the rumours?

I think it was obvious when they sold Alliance Healthcare that Boots faced an uncertain future. I have long suspected AmerisourceBergen will take over WBA at some point and the sale of Alliance to them only fuels my speculation further. Boots (and for that matter beauty brand No7) have been underperforming for many years, and dragged on WBA's performance overall so its little surprise they are keen to offload. The ideal opportunity to so appears to be now because 2020's lockdown left high streets and retail parks deserted which lead to a rebound effect in 2021. WBA are reporting an increase in Boots sales of 8.8% in the latest trading update which sounds good but when you consider the comparative was a lockdown, with empty high streets it doesn't give a true reading. The long term trend of Boots is of decline and their 2200 stores require a lot of investment to have any chance of a return to growth. It's a smart move to sell the chain now on the back of "good" trading results to maximise the sale value. The real question is what will become of Walgreens Boots Alliance? With Both Alliance and seemingly Boots gone it only leaves one of the three letters remaining. My money is on an acquisition of the remaining Walgreens business with AmerisourceBergen in which Stefano Pessina becomes CEO and majority shareholder of the overall business. If you look at his track record, it appears to be the way he conducts business.