INDIA – Billionaire Mukesh Ambani’s Reliance Industries (RIL) and US buyout firm Apollo Global Management are preparing to make a firm offer for drug retailer Walgreens Boots Alliance’s UK-based Boots business, with a binding bid expected as early as today (June 03) — according to a report in the Economic Times.
The drugstore chain is currently owned by American retail giant Walgreens Boots Alliance and has a presence in the United Kingdom, Ireland, Italy, Norway, the Netherlands, Thailand, and Indonesia.
If the RIL-Apollo joint bid for the UK’s high street chemist chain is successful, it will give Boots the firepower to expand into India, Southeast Asia, and the Middle East.
Furthermore, under the plan, RIL and Apollo would own stakes in Boots, though it is unclear whether the stakes would be of equal size.
Walgreens listed the company for sale in December of last year, seeking a valuation of around 7 billion pounds (US$8.8 billion) for Boots, though bidders had estimated its value at around 5 billion pounds (US$6.3 billion) in earlier non-binding rounds.
In an earlier development, as reported in Business Standard, a consortium backed by billionaire businessmen Issa brothers was planning to drop out of the race for Boots over price disagreements.
They balked at a request by Walgreens to increase their offer for the Boots drugstore chain.
The Issa-TDR group was bidding together for Boots through Asda Group Ltd, the British grocery chain they jointly own.
According to bankers, RIL’s overseas subsidiary has partnered with American private equity firm Apollo Global Management to fund the transaction and is in talks with other foreign banks.
If Ambani wins the race, he will have access to 2,200 stores in Europe, giving him a formidable presence in the European retail market.
In 2020, RIL had acquired online drug seller NetMeds in India for approximately Rs 620 crore (US$53 million and the Boots acquisition will help it launch NetMeds abroad and bring the offline retail chain to India.
“We have made and will continue to make necessary disclosures in compliance with our obligations under Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and our agreements with the stock exchanges,” a Reliance spokesperson told the business daily.
In addition, Ambani, the world’s eighth wealthiest man with a US$99.7 billion net worth, is no stranger to acquiring international brands, having purchased the British toy retailer Hamleys for £67.96 million (US$85.24 million) in an all-cash deal through RIL subsidiary Reliance Brands in 2019.
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