WBA takeover talks could trigger sale of Boots

Walgreens Boots Alliance (WBA) is reportedly in discussions with private equity giant Sycamore Partners on a potential takeover, which could trigger a fresh auction of Boots. 

It is understood that Sycamore Partners would seek separate ownership for UK subsidiary Boots if it does succeed in taking WBA private – potentially triggering a fresh auction for the British health and beauty retailer.

Walgreens’ chairman and largest shareholder Stefano Pessina may end up as the principal owner of Boots depending on the deal’s structure, according to Sky News.

Pessina, who holds a 17% stake in WBA, has been a key figure in Walgreens’ acquisitions over the past two decades.

It's not the first time WBA has explored the sale of Boots, having put the high street giant up for sale with a price tag of £7 billion in 2022. This was later called off after failure to find a suitable buyer.

Reports suggested that the company revisited the idea of a sale or UK listing earlier this year but were later dismissed by WBA with plans to "unlock value" of Nottingham-based business.

Shortly after, Boots boss Seb James announced his resignation. He was replaced by ex-Asda COO Anthony Hemmerdinger last month.

Earlier this year, WBA confirmed plans to shut 1,200 US stores over the next three years after losses widened for the past year. The firm will have around 1,900 stores after the closures are completed.

It came as Boots UK revealed that total sales grew by 2.3% over the fourth quarter. Comparable retail sales were 6.2% higher for the quarter, primarily driven by skincare and premium beauty products.

Walgreens Boots Alliance was formed through the combination of Walgreens and Alliance Boots in 2014. The transaction brought together two retail giants with "iconic brands, complementary geographic footprints, shared values and a heritage of trusted healthcare services through pharmaceutical wholesaling and community pharmacy care, dating back more than 100 years".