Magazine article Management Today

Company Vitae: Alliance Boots

Magazine article Management Today

Company Vitae: Alliance Boots

Article excerpt

US giant Walgreens has just acquired 45% of the UK's favourite chemist. Here's the due diligence on what it's getting for its dollars 6.7bn.

Formative years

John Boot opened his first store in Nottingham in 1849. Back then, medical treatment was as likely to kill as cure, so Boot specialised in traditional herbal remedies and homeopathy instead. Son Jesse Boot took over in 1860, building up the business as a manufacturing chemist. Boots was acquired by the United Drug Company of Boston, Massachusetts in 1920. But, 13 years later, Jesse's son John Boot bought it back again, and it remained British-owned for the next 74 years. In 1935 the famous No 7 cosmetics brand appeared. Boots prospered post war with the emergence of the NHS and the mass prescription of drugs, and even got involved in pharmaceutical research. In 1961, a team of chemists working for Boots discovered and patented the painkiller ibuprofen.

Recent history

In an attempt to keep growing in the 1990s, the company diversified, owning DIY chain Do It All and car spares outfit Halfords for a while It later made similarly short-lived efforts to get into beauty treatment, homeopathy and laser eye surgery. In 2006 Alliance Unichem made its successful pounds 12bn bid, then Britain's largest-ever LBO, which created a group operating in 21 countries. Last month, it was announced that Alliance Boots was going all American again, as Illinois-based giant Walgreens offered dollars 6.7bn for a 45% stake in it, with an option to buy the remaining 55% for dollars 9. …

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