LONDON - British pharmacy chain Boots Group PLC and Alliance UniChem, the third largest pharmacy group in Europe are in advanced merger talks, in a deal that could be worth £7.5 billion.
The merger if it does happen would create Britain's largest pharmacy group with 2,600 sites employing more than 101,000 people. "In some ways, this deal has been under negotiation for years, although talks only really became serious over the past five months or so," a source close to the negotiations told the Sunday Telegraph.
The deal could come at a right time for Boots, which is struggling to recover from an 11 percent loss last year and stiff competition from supermarket chains Tesco and Asda. The new entity will be called Alliance Boots and would have control over 15 percent of the country's pharmacy business, a figure that could prompt competition concerns and could interest the Competition Commission. Subject to successful negotiations, the deal could be announced to the London Stock Exchange on Monday.
However, this deal would not have any effect on the proposed sale of Boots Health International, the company's international venture, according to the Financial Times, "Under the terms of the merger, the proceeds of the sale of BHI would be returned to Boots' shareholders and the remaining business would be merged with Alliance UniChem on a 50-50 basis," the paper said.
If any deal is not announced, The Takeover Panel will ask the companies to confirm that they are in negotiations. Boots chief executive Richard Baker and chairman Sir Nigel Rudd could hold on to thier posts in the merged group.
Posted
on : Mon, 03 Oct 2005 04:05 GMT | Business News
By : Chris Rowe
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