Walgreens abandons plan to sell Boots business; RIL-Apollo bid rejected

Walgreens Boots Alliance on Tuesday said it has scrapped its plan to sell its UK high street pharmacy chain Boots due to "unexpected and dramatic change" in the global financial markets since launching the sales process in January.

Earlier this month, Reliance Industries Limited together with private equity group Apollo Global Management Inc made a firm and fully financed offer to buy Boots – Britain’s biggest pharmacy chain – for $6.3 billion, much lower than original 7 billion pounds ($8.8 billion) price tag that was sought by Walgreens. The Reliance-Apollo offer also involved Wallgreens retaining a “significant” minority stake in the company.

This deal was pegged to be the largest cross border acquisition for Mukesh Ambani led RIL.

The American health-care group had been in talks with a consortium between Reliance Industries and Apollo Global Management for over £5 billion ($6.1 billion) sale of Britain’s biggest pharmacy chain.

The firm has put its Boots business up for sale after announcing a strategic review in January as the second-largest US pharmacy chain renewed its focus on the domestic healthcare.

As a result of “market instability severely impacting financing availability, no third party has been able to make an offer that adequately reflects the high potential value of Boots," Walgreens said in a statement.

The recent strong performance of Boots, and its key No7 beauty brand, is also behind the decision to retain the business, the company added in the statement.

The 173-year-old Boots business includes 2,200 stores in the UK, including pharmacies, health and beauty stores.

The company sold its distribution business for $6.5 billion to US drug wholesaler AmerisourceBergen last year.