Alliance Boots

Following a short period of speculation amongst financial analysts, it was announced in October 2005 that Boots Group would merge with Alliance UniChem in a deal valuing both companies equally and said to be worth around £7 billion.[5] Rival firm Celesio, owner of the Lloyds Pharmacy chain, challenged the deal, although were rejected by the Competition Appeal Tribunal. The merger received final approval from the Office of Fair Trading in February 2006 and completed on 1 August 2006, although 96 shops were sold to comply with a condition laid down by the OFT. Former Boots Group shareholders held 50.2% of the new company, with former Alliance UniChem shareholders owning 49.8%.[6]

On 25 April 2007, Alliance Boots was approached with a buy-out offer by New York City-based private equity firm Kohlberg Kravis Roberts in conjunction with Alliance Boots' then Executive Deputy Chairman, Stefano Pessina, for an estimated £12.4 billion.[7] Alliance Boots was the first company on the FTSE 100 share index to be bought-out by a private equity firm. Almost £9 billion was advanced by investment banks, including Deutsche Bank, Citigroup, J.P. Morgan, UniCredit, Barclays, Merrill Lynch, the Bank of America and the Royal Bank of Scotland. Simultaneously the banks, as so-called "equity underwriters“, together invested around £1.4 billion in the buyout company. The reverse takeover and subsequent privatisation was dubbed as "the best deal ever struck" by a managing partner at a private equity firm in June 2008.[8]

Alliance Boots GmbH was established in Switzerland during 2008 and is a direct subsidiary of AB Acquisitions Holdings Limited, a company which owns 55% of Alliance Boots GmbH's shares.

It was announced on 19 June 2012 that Walgreens would purchase a partial stake in Alliance Boots, as the first step in a three-year merger plan. Walgreens paid $6.7 billion for this share, and subsequently on 6 August 2014 Walgreens exercised its option to complete the second step of its strategic transaction with Alliance Boots to create the first global pharmacy-led health and beauty retailer, with over 12,000 stores worldwide.[9] The two companies had established Walgreens Boots Alliance Development Company in late 2012 to further their integration. The first publicly visible sign of the merger came in November 2012 when Boots skincare brand No7 debuted in a Walgreens store in Los Angeles, with a view to further rolling out the Boots brand across the US.

Walgreens' shareholders approved the purchase on 29 December 2014, and it was completed on 31 December. Under the terms of the merger, the two companies became subsidiaries of a new holding company, Walgreens Boots Alliance Inc. which remains headquartered in Deerfield, Illinois.[4] The new company is organised into four divisions, of which Walgreens and Boots each became one. The two remaining divisions are Pharmaceutical Wholesale and International Retail, which includes Alliance Healthcare, and Global Brands.[10]

Interior of a Boots store

Boots UK formed the main retail business of Alliance Boots in the United Kingdom, and all former Alliance Pharmacy branches were rebranded as Boots. The Boots brand has a history stretching back over 160 years and is a familiar sight on Britain's high streets. Boots stores are located in prominent high street and city centre locations as well as in local communities. Most branches include a pharmacy, and focus on healthcare, personal care and cosmetic products, with most stores selling over the counter medicines.

Larger stores typically offer a variety of healthcare services in addition to dispensing prescriptions, such as flu vaccination, cholesterol screening, weight loss advice, hair retention treatment, smoking cessation advice and products, and chlamydia testing & treatment (private service). Optician services are also offered in many larger stores, with Boots Opticians providing eye tests along with the sale of spectacles and contact lenses.

Many stores also feature traditional photo processing and/or a Kodak picture kiosk where users of digital cameras and camera phones can create prints. Larger stores usually offer a range of electrical equipment such as hairdryers, curlers and foot massagers, whilst selected stores offer a range of sandwiches, baguettes, wraps, salads and beverages.

Boots operates a loyalty card programme branded as the Boots Advantage Card, and claims to have 17.8 million regular users.[12]

Since 1936, there have been Boots stores outside the UK. Stores in countries as widely spread as New Zealand, Canada (see Pharma Plus) and France were all closed in the 1980s. Today, there are Boots branded stores in several countries including the UK, Norway, Ireland, The Netherlands, Thailand, as well as the Middle East.

Much of the Irish chain was acquired by purchasing Hayes Conyngham Robinson in 1998,[13] although Boots had been present in Ireland prior to this. In 2013/2014, there were 76 stores in the Republic.[14] In July 2011, an investigation by Ireland's National Consumer Agency found Boots to be the most expensive pharmacy for prescription drugs.[15]

In other countries (including Kuwait, Hong Kong, and the USA), Boots products are sold from instore 'implants' in department stores and other pharmacies.

Alliance Healthcare formed the backbone of Alliance Boots wholesale and distribution service, with twice daily deliveries to more than 16,000 delivery points in the UK alone.[16] Internationally, Alliance Healthcare supplies medicines, other healthcare products and related services to over 180,000 pharmacies, doctors, health centres and hospitals from over 370 distribution centres in 20 countries.[17]

In addition to the wholesale of medicines and other healthcare products, Alliance Healthcare provides services to pharmaceutical manufacturers who are increasingly changing and adapting their approaches to distribution, while at the same time outsourcing non-core activities. These services include pre-wholesale and contract logistics, direct deliveries to pharmacies, and specialized medicine delivery including related home healthcare.

In recent years it has entered the fast-growing Russian and Chinese markets.

Alphega Pharmacy: Alphega Pharmacy offers a comprehensive range of added-value services to independent pharmacy customers, including branding, professional training and patient care, retail support services and supply benefits together with pharmacy and IT support. Alphega Pharmacy is focused on building a network of independent pharmacists across Europe under a shared brand.[18]

Almus is a brand of over 400 generic medications used both in human and veterinary applications. Initially launched in 2003 in the United Kingdom by the US based Almus family, the brand was bought by Alliance Healthcare in 2014.[19] It now operates under the Walgreens Boots Alliance brand. When the Almus brand was created it was a catalyst for change in the generic medicines industry with its unique colored packaging. Almus has placed considerable emphasis on the design of the packaging in an attempt to reduce errors by the dispensing pharmacist and by the patient relating to incorrect dosage which can result in either a dangerous accidental overdose or an equally dangerous under-dose. The brand has won numerous awards for the design of their packaging and documentation.[20] Over the years, the packaging has helped pharmacists ensure medicines are dispensed correctly and increased safe patient usage.

The award-winning range has expanded rapidly with volumes growing from thousands of medication orders per month when first launched, to now seeing millions of monthly orders distributed to pharmacies across the globe.[21] Operating with an average net profit of over $2 billion USD annually, Almus became increasingly valuable in the years leading to the Alliance Healthcare/Walgreens merger. In the three-year period prior to the sale of Almus, financial disclosures reveal the US based founder, Dr. Patrick Almus, received nearly $5.25 billion in corporate dividend payments.[22] At the time of the sale Almus had a valuation of over $9.75 billion USD.[23]

Almus Pharmaceuticals works with some of the world's largest biotechnology and pharmaceutical development companies. In 2013 Almus paired with Pfizer on the launch of Almus Atorvastatin, one of the most prescribed statins in the world, used to regulate blood cholesterol levels. Jason Perfitt, Head of Customer and Channel Marketing at Pfizer said: "As Pfizer entered a new phase in its corporate development, we needed to work with a partner that shared many common values: integrity of supply chain, high quality product lines and with patient care at the center of all that is done. We found these values were common to both Pfizer and Almus and so we have been delighted to partner with the brand."[24]

BCM Limited is the contract manufacturing business of Alliance Boots and manufactures a range of own-brand and third-party medicines, and cosmetic product ranges such as No 7, Kangol, Toni & Guy, FCUK, Soltan and Botanics. Some are sold through Boots stores whilst others are sold through third party stores such as French Connection and Toni & Guy. BCM has facilities in the UK, Germany, France and Poland.[25]

BCM Specials manufactures bespoke non-licensed medicines for UK hospital and retail pharmacies.