Sigma Healthcare pulls out of Boots takeover talks

Australian pharmacy group Sigma Healthcare confirmed last Wednesday that it had held "preliminary discussions" over a takeover of Boots, but has today confirmed that it has pulled out of takeover talks.

Boots, the UK beauty and pharmacy giant, revealed last week that it had held early discussions over a potential takeover deal with an estimated valuation of around $10 billion (£7.5 billion), according to reports by the Financial Times.

Bosses at Sigma said the company had "elected to withdraw its interest and cease discussions immediately".

The Australian company said it had engaged in the sale process for Boots as it provided a "potentially unique opportunity" to accelerate its operations across the UK.

However, it said it "concluded that such an acquisition would not currently meet its strategic and capital investment objectives".

Sigma said it remains committed to growth in the UK, after acquiring a stake in London-based pharmacy business Greenlight Healthcare earlier this year.

Last week, it was also reported that Boots held talks with the Canadian branch of the billionaire Weston family, which owns the majority of grocery chain Loblaws.

The Weston family’s British side is the majority owner of Primark through its parent firm Associated British Foods. No further reports have been made regarding the Weston family's interest in Boots.

The potential sale comes only a year after Boots was snapped up by private equity firm Sycamore Partners after the US investment giant acquired parent firm Walgreens Boots Alliance for 23.7 billion US dollars (£17.7 billion).

In August last year, Sycamore split Boots from the US operations.

The new UK-based Boots business included Boots UK and Ireland, Boots opticians, No7 Beauty company and pharmacies in Thailand, Mexico and Germany.

It is understood that Sycamore is still considering a potential initial public offering (IPO) for Boots on the London stock market.

Initial reports in April revealed that Boots and Sycamore had hired consultants on a strategy overhaul in preparation for a possible London listing in 2027.

The advisors had also been tasked with exploring growth initiatives across the beauty and wellness sectors.

However, a private sale would deal a fresh blow to the London Stock Exchange amid a dearth of new major listings in recent years.

The latest reports also follow the appointment of a new CEO for Boots, announced in May. Alex Baldock, the former Currys boss, was confirmed to be joining Boots as Chief Executive in the autumn. The appointment was considered to be a further milestone in the health and beauty retailer's ongoing business transformation.

Former Boots CEO Ornella Barra stepped down from the role in January to become Chair, with Anthony Hemmerdinger, Senior Vice President and Managing Director of Boots UK, Ireland, Opticians and No7 Beauty Company, tasked with leading the business in the interim.

The reported sale talks come as Boots has been investing in its beauty and wellness credentials. Boots today operates over 1,800 stores across Britain, selling health and beauty products as well as pharmacy services. In May it further added to its portfolio, opening its second beauty-only concept store at Cabot Circus in Bristol in May.

The 11,000 sq ft location carries more than 200 beauty brands across skincare, haircare, fragrance, cosmetics, wellness and electrical beauty categories, and is the retailer's first standalone beauty concept outside London following its 2023 launch at Battersea Power Station.