Drugstore chain Walgreen Co. and international pharmacy-led health and beauty group Alliance Boots have partnered to create what they’re calling the first global pharmacy-led, health and well-being enterprise.
Boasting more than 100 years of business combined, the companies comprise more than 11,000 stores in 12 countries, and a pharmaceutical wholesale and distribution network with more than 370 distribution centers delivering to more than 170,000 pharmacies, doctors, health centers and hospitals in 21 countries. The companies say they are also positioned as the world’s largest purchaser of prescription drugs and other health and well-being products, and expect an increasing portfolio of retail, business, health and beauty brands.
“We are looking forward to working with Alliance Boots to leverage our combined strengths and provide an even broader range of innovative, cost-effective products and services to patients and customers across the healthcare landscape,” said Gregory Wasson, president and CEO of Walgreens. “Together we will be ideally positioned to expand our customer offerings in our existing markets and become the health and well-being partner of choice in emerging markets.”
Walgreens will invest approximately $6.7 billion in cash and stock in exchange for a 45% equity ownership stake in Alliance Boots. The company will also have the option to proceed to a full combination by acquiring the remaining 55% of Alliance Boots in approximately three years’ time.
Walgreens expects the partnership to see between $100 million and $150 million in the first year and $1 billion by the end of 2016. The goal is for the respective management teams to work closely on key projects, while progressing to full integration in approximately three years’ time. The pharmacy-led retail and wholesale businesses of both companies will continue to operate under their individual brand names. Upon completion of the second step of the transaction, the name of the new combined entity will reflect the heritages of both companies.
The companies add that the complementary geographic footprints of both companies require no plans for job reductions at either company. Walgreens’ headquarters will remain in Deerfield, Illinois; and Alliance Boots’ support offices will be maintained across Europe, including in the United Kingdom, as well as at the Alliance Boots operational hub in Nottingham, England.
[Photo caption: Alliance Boots executive chairman Stefano Pessina (left) and Walgreens president and CEO Greg Wasson. Photo credit: Business Wire]