When rumours surfaced in January that the Issa brothers – Mohsin and Zuber – who are owners of supermarket giant Asda, takeaway chain Leon, and petrol forecourt business the EG Group, were interested in taking over Boots UK, questions rose as to what that might look like for the UK community pharmacy market.

And now, those discussions have resurfaced with the latest development in the Boots UK sale rumours.

 

Read more: Two investment firms in rumoured joint bid for Boots UK as multiple confirms business review

 

US private equity firm Bain Capital and UK-based CVC Capital – who were originally the rumoured frontrunners to scoop the health and beauty giant in a joint bid – have reportedly pulled out of the running, “largely down to the price expectations of the chain’s owner” Walgreens Boots Alliance, according to Sky News.

With reports of Boots UK’s parent company planning an auction of its UK division, speculations of the sum such a sale could generate have oscillated between £6 billion and £10bn, according to reports in The Times, Sky News and The Guardian.

Interested parties were reportedly given two weeks to submit their bids last month.

 

Impact on the pharmacy market?

 

With 2,150 pharmacy contracts and 51,000 employees across the UK, any movement for the Boots UK chain would have a big impact on the wider community pharmacy – and retail – market.

Asda owns around 255 in-store pharmacies, and if the supermarket giant were to buy Boots UK, it would most likely be subject to a Competition and Markets Authority (CMA) investigation – akin to when Lloydspharmacy bought the Sainsbury’s pharmacy chain in 2015 – “to make sure [the business mergers] don’t reduce competition” across the UK.

 

Read more: Rumours Asda interested in taking over Boots UK

 

Speculating on what a potential Asda takeover might mean for the wider market, Scott Hayton, director of pharmacy brokers Hutchings Consultants, told C+D: “It’s unlikely any significant number of the existing Boots branches would be able to relocate to Asda stores, so one possibility is to combine the offerings of both businesses into a small format high street-based retail operation benefiting from the increased footfall of both brands’ customers.”

Asda said that it did not comment on speculation when approached by C+D about the latest rumours.

Mr Hayton suggested that the Issa brothers could use their “experience of operating large-scale retail businesses” to implement a future-proof vision for the Boots UK brand.

“With the challenges faced by the high street and pharmacy generally, it’s possible that [the Issa brothers] may have a dedicated vision for Boots, focusing on the future of healthcare and preventative treatment and services,” he speculated.

“They appear well-backed financially,” he added.

“With an entrepreneurial approach and varied business background, anything is possible.”

 

Read more: Seb James: Boots UK well-positioned to become independent company

 

While Walgreens Boots Alliance has not explicitly said that it plans to sell off its UK pharmacies, it has publicly confirmed that a “strategic review”  of its UK arm is underway.