Australian pharmacy business Sigma Healthcare has pulled out of takeover talks to buy Boots. The UK beauty and pharmacy giant revealed last week that it had held early discussions over a potential takeover deal. However, on Monday, bosses at Sigma said the company has “elected to withdraw its interest and cease discussions immediately.”
Sigma's Strategic Decision
The Australian company said it engaged in the sale process for Boots as it provided a “potentially unique opportunity” to accelerate its operations across the UK. However, it “concluded that such an acquisition would not currently meet its strategic and capital investment objectives.” Sigma said it remains committed to growth in the UK, after acquiring a stake in London-based pharmacy business Greenlight Healthcare earlier this year.
Other Potential Buyers
Last week, it was also reported that Boots held talks with the Canadian branch of the billionaire Weston family, which owns the majority of grocery chain Loblaws. The Weston family’s British side is the majority owner of Primark through its parent firm Associated British Foods, which also owns grocery brands including Twinings and Ryvita. Reports suggested that Boots could be valued at around 10 billion US dollars (£7.5 billion) as part of a sale.
Background of Boots Ownership
The potential sale comes only a year after Boots was snapped up by private equity firm Sycamore Partners after the US investment giant acquired parent firm Walgreens Boots Alliance for 23.7 billion US dollars (£17.7 billion). In August last year, Sycamore split Boots from the US operations. The new UK-based Boots business included Boots UK and Ireland, Boots opticians, No7 Beauty company and pharmacies in Thailand, Mexico and Germany.
Future Prospects
It is understood that Sycamore is still considering a potential initial public offering (IPO) for Boots on the London stock market. However, a private sale would deal a fresh blow to the London Stock Exchange amid a dearth of new major listings in recent years.
