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Alliance Boots

Alliance Boots GmbH
Gesellschaft mit beschränkter Haftung
Industry Pharmaceuticals
Retailing
Fate Merged with Walgreens
Successor Walgreens Boots Alliance
Founded 2007 (Alliance Boots)
1849 (Boots)
1997 (Alliance UniChem)
Defunct February 2015
Headquarters Bern, Switzerland
(Registered office)
Nottingham, United Kingdom
Weybridge, United Kingdom
(Operational headquarters)
Area served
Global
Key people
Stefano Pessina (Executive Chairman)
Products Boots
No7 - skincare and cosmetics
Soltan - Suncare
drug store/pharmacy, other specialty
Revenue £23.4 billion (2013/14)[1]
Number of employees
Over 120,000 (2013/14)[2]
Subsidiaries Alliance Healthcare
Boots UK
Boots Opticians
Guangzhou Pharmaceuticals (50%)

Alliance Boots GmbH was a multinational pharmacy-led health and beauty group with corporate headquarters in Bern, Switzerland and operational headquarters in Nottingham and Weybridge, United Kingdom. The company had a presence in over 27 countries including associates and joint ventures and in 2013/14, reported revenue in excess of £23.4 billion.[1] It had two core business activities – pharmacy-led health and beauty retailing, and pharmaceutical wholesaling and distribution – and also increasingly developed and internationalised its product brands.

The company was formed in 2006 by the merger of the British high street pharmacist Boots Group and the pan-European wholesale and retail pharmacy group Alliance UniChem and was listed on the London Stock Exchange as Alliance Boots plc. In 2007 it was bought out in a private equity transaction by AB Acquisitions Limited, led by Stefano Pessina and Kohlberg Kravis Roberts (KKR). Alliance Boots GmbH was established in Switzerland during 2008 and is a direct subsidiary of AB Acquisitions Holdings Limited, which held all shares in the company. In August 2012, Walgreens purchased 45% of shares as part of a plan to merge the two businesses, with an option to acquire the remaining shares within three years.[3] It exercised that option in August 2014, and following shareholder and regulatory approvals, the two businesses merged on 31 December 2014 to form Walgreens Boots Alliance.[4]

The group's operations were mainly carried out under the Boots and Alliance Healthcare brands. Boots UK is the UK's leading pharmacy-led health and beauty retailer. Alliance Boots is also the largest pharmaceutical wholesaler in the UK through its Alliance Healthcare (Distribution) Ltd business. The company employs over 120,000 staff and operates more than 4,600 retail stores, of which just over 4,450 have pharmacies. Alliance Boots pharmaceutical wholesale division serves over 180,000 pharmacies, doctors, hospitals and health centres from over 370 distribution centres in 20 countries.[1] Both companies became subsidiaries of Walgreens Boots Alliance on completion of the merger.

Contents

  • History 1
    • Establishment 1.1
    • Acquisition by Stefano Pessina and KKR 1.2
    • Walgreens merger 1.3
  • Operations 2
    • Health and Beauty Retail 2.1
      • Boots UK 2.1.1
      • Internationally 2.1.2
    • Wholesale 2.2
      • Alliance Healthcare 2.2.1
      • Almus 2.2.2
    • Contract manufacturing 2.3
    • Product brands 2.4
  • Subsidiary companies 3
  • Controversies 4
  • See also 5
  • References 6
  • External links 7

History

Establishment

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 31 March 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]

Acquisition by Stefano Pessina and KKR

On 25 April 2007, Alliance Boots was approached with a buy-out offer by New York City-based £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.

Walgreens merger

It was announced on 19 June 2012 that Walgreens would purchase a 45% 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 Walgreen 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,

  • Official website

External links

  1. ^ a b c [2], allianceboots.com.
  2. ^ "Expert Review". Corporateregister.com. 2014-01-24. Retrieved 2014-08-22. 
  3. ^ "Post Alliance Boots buyout Walgreens to stay on in US". Chicago News.Net. Retrieved 7 August 2014. 
  4. ^ a b McCoy, Kevin (29 December 2014). "Shareholders OK Walgreens-Alliance Boots deal". USA Today. Retrieved 29 December 2014. 
  5. ^ "Alliance and Boots: a tale of two chemists". BBC News Online. 3 October 2005. Retrieved 9 November 2012. 
  6. ^ Alliance Boots IR
  7. ^ "Terra Firma drops Boots bid plan". BBC News Online. 24 April 2007. Retrieved 9 November 2012. 
  8. ^ Lewis, Toby; Craig, Catherine (23 Jun 2008). "Alliance Boots thrives thanks to KKR medicine".  
  9. ^ Harry Wallop (19 June 2012). "Alliance Boots sells 45pc stake to Walgreens". The Telegraph. Retrieved 28 May 2013. 
  10. ^ "Strategic partnership". Walgreens and Alliance Boots. 2014. Retrieved 28 September 2014. 
  11. ^ "Alliance Boots: 'Good progress' with Walgreens - Retail News Breaks - Front Page - Chain Drug Review :: Reporter for the Chain Drug Store Industry". Chain Drug Review. 2013-05-15. Retrieved 2014-08-22. 
  12. ^ "Retail Week". May 2013. 
  13. ^ Country selection page at Boots online shopping site.
  14. ^ Pharmacists join the ranks of millionaires
  15. ^ "Boots Ireland to open three new shops in Cork and Dublin". RTE News. 11 April 2014. 
  16. ^ "Chain to review drug charges as huge price gaps uncovered". Irish Independent. 9 July 2011. 
  17. ^ "Retail Week". October 2013. 
  18. ^ "German Retail Blog". May 2013. 
  19. ^ "Retail Week". December 2013. 
  20. ^ Almus Media Centre
  21. ^ BCM, bcm-manufacturing.com.
  22. ^ Mums Net, mumsnet.com
  23. ^ Alliance Boots, allianceboots.com
  24. ^ Tax exemption protest at Boots - London

References

See also

Alliance Boots was accused of locating its headquarters in Switzerland solely to reduce its tax liabilities in the United Kingdom. In January 2011 protests were held at a number of Boots stores, including its flagship London store, which was closed down by protestors. The protest group UK Uncut claimed that Alliance Boots' Switzerland headquarters consists only of a post office box and that its relocation has reduced its annual tax liability by £86 million. Alliance Boots said that its new headquarters would better reflect the international nature of its wider group.[24]

Controversies

Alliance Boots subsidiaries included:

Subsidiary companies

Boots Laboratories skincare range for independent pharmacy customers was launched in France and Portugal in 2008/09. The Boots Laboratories skincare range is sold in Spain, Italy and Germany.[23]

First launched in 1995, the Botanics range, developed in partnership with the Royal Botanic Gardens, Kew in London, uses high quality plant extracts combined with the latest skincare technology in a variety of products, including skincare, haircare, men’s toiletries, baby and indulgent bathing. Botanics includes a range of organic products, The Botanics range is not only sold in Boots stores, but is also internationally available through third party retailers.

Launched in 1939, Soltan is known for its UVA 5-star protection, a standard of protection developed by Boots and now adopted as the benchmark for suncare products in the UK.[22]

Launched in 1935, No7 is best known for its anti-aging beauty serums, developed in Nottingham and all independently scientifically tested. The range of anti-aging serums first appeared in 2007. The range comprises four clinically proven anti-aging serums designed to target the aging concerns of a specific age group. In May 2014, two new No7 Protect & Perfect ADVANCED Serums were launched for women aged between 35 and 45 years. No7 also has a skincare range for men and a range of cosmetics. No7 is not only sold in Boots stores, but is also internationally available through third party retailers.

The Boots own brand range of products includes skincare, medicines, healthcare products and many more.

Product brands

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

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.[21]

Contract manufacturing

Almus is an umbrella brand for the wide range of lower cost generic medicines, which was initially launched in the UK in 2003. Alliance Boots has placed considerable emphasis on the design of the packaging in an attempt to reduce the number errors by the dispensing chemist and by the patient relating to incorrect dosage which can result in either a dangerous accidental overdose or an equally dangerous under dose. Almus has won numerous awards for the design of their packaging and documentation.[20]

Almus is a brand of generic prescription drugs sold in five countries.

Almus

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.[19]

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

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 specialised medicine delivery including related home healthcare.

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.[17] 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.[18]

Alliance Healthcare

Wholesale

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

Much of the Irish chain was acquired by purchasing Hayes Conyngham Robinson in 1998,[14] although Boots had been present in Ireland prior to this. In 2013/2014, there were 76 stores in the Republic.[15] In July 2011, an investigation by Ireland's National Consumer Agency found Boots to be the most expensive pharmacy for prescription drugs.[16]

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.

Internationally

Boots operates a loyalty card programme branded as the Boots Advantage Card, and claims to have 17.8 million regular users.[12] Users earn 4 points (worth 1p each) for every £1 spent. In Ireland, users earn 4c for every €1 spent. Boots also operate a transactional website for online shopping in the United Kingdom.[13]

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.

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.

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.

Interior of a Boots store

Boots UK

Health and Beauty Retail

Alliance Boots operations are split into two areas, pharmacy-led health and beauty retailing and pharmaceutical wholesaling and distribution. The Group also has a stand alone contract manufacturing business called BCM and increasingly develops and internationalises its product brands.[11]

Operations

[10]

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