US pharmacy giant Walgreens has dropped plans to sell Boots, saying buyers were unable to raise enough funds due to instability in financial markets. Walgreens said it had various offers for the pharmacy business after it put Boots up for sale in January. But none of the offers adequately reflected the high potential value of the UK pharmacy chain, it said.
Potential buyers for Boots reportedly included Indian billionaire Mukesh Ambani and US buyout firm Apollo Global Management, who made an offer valuing the business at about £5 bn.
The Walgreens Boots Alliance said it would now keep Boots and the No7 beauty brand. The Walgreens merger deal for Boots in 2014 valued the firm at about £9 bn at the time.
Walgreens said it had moved away from plans to offload Boots after an "unexpected and dramatic change" in the financial markets. "As a result of market instability severely impacting financing availability, no third party has been able to make an offer that adequately reflects the high potential value of Boots and No7 Beauty Company," it said.
Retail analyst Catherine Shuttleworth said that Walgreens had wanted more for Boots than suitors had been prepared to pay for it. She said raising the necessary funds to buy it would have been difficult in the current market, and that Boots has a "significant" pension liability. One of the main challenges for Boots, she said, is that it is possible to buy equivalent products from competitors such as supermarkets and online shops.
