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The Americans are coming

How much does the nationality of a parent company really matter? Jennifer Richardson thinks the Alliance Boots/Walgreens deal is a massive vote of confidence in the sector's future

The Americans are coming – but it isn't the first time. When rumours of a US buyout of Great British brand Boots began to circulate almost a century ago, so the story goes, Jesse Boot's house was besieged by journalists – with one breaking in, only to be fought back by Jesse's wife brandishing a rolled up newspaper. Thankfully, nobody at C+D had to go to such dubious lengths this week to bring you the news that stateside pharmacy chain Walgreens has agreed a deal to buy a 45 per cent stake in Alliance Boots in a multibillion-pound deal.

In an exclusive interview, Alliance Boots health and beauty chief executive Alex Gourlay told C+D that the deal's "biggest win" would be for pharmacists, and reiterated executive chairman Stefano Pessina's ruling out of job cuts. No doubt Boots pharmacists will reserve judgement; buyouts and mergers are always nerve-racking, better the devil you know generally being the approach.

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But American buyouts, for whatever reason, seem to evoke particular unease among UK employees. And when they involve much loved British brands such as Boots this unease spreads to the population at large. In 1920, when the United Drug Company of America did indeed purchase Boots in a move that would not see the company return to British ownership for 13 years, then Prime Minister David Lloyd George faced a parliamentary grilling; 2010's Kraft buyout of Cadbury also prompted debate in the House of Commons. So expect similar uproar over the Walgreens deal.

But how much does the nationality of the parent company really matter? Boots will be forever British in terms of history and heritage, but in terms of ownership and outlook it has been international for some time. Back in 2007 Alliance Boots was bought by a confederate of American-born and -based private equity firm KKR and Italian-born, Monaco-based Mr Pessina; a year before that, the Boots Group had joined with pan-European wholesaler Alliance Unichem to create a continental giant with a presence in 25 countries.

Whatever Walgreens' origins, the questions over how the deal will affect Boots pharmacists are the same. Also unclear is any potential knock-on impact in the wider community pharmacy network. But in the week after European pharmacy trade bodies warned the sector needed a new business model globally, it can't be denied that £4.27 billion is a rather large vote of confidence in the network's future across the continent, including the UK.

Jennifer is on Twitter @CandDJennifer




What's your view on the Walgreens/Alliance Boots deal?

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