Walgreens to retain ownership of UK-based Boots business

The business runs a network of more than 2,200 stores across the UK, as well as private-label brands like No7 Beauty Co. and operations in a smattering of other countries

Walgreens Boots Alliance on Tuesday scrapped its plan to sell its UK high street pharmacy chain, Boots, saying no third party was able to make an adequate offer due to the turmoil in the global financial markets.

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

The decision to retain Boots and No7 Beauty Company has also been supported by their ongoing strong performance, Walgreens said.

The announcement comes at a time when a news reported on Sunday said Reliance Industries Ltd. is in talks with several global banks to raise as much as $8 billion for its planned leveraged buyout of Walgreens Boots Alliance’s international arm. 

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

The company sold its distribution business for $6.5 billion to U.S. drug wholesaler AmerisourceBergen last year. Walgreens had cut jobs, suspended share repurchases and closed some of its UK-based Boots stores to save costs and revive profit growth that took a major hit as the COVID-19 crisis hammered sales at its stores and pharmacies in 2020.

Walgreen shares fell nearly 3% to $41 before the bell.

The Boots sale had emerged as a litmus test for dealmaking in the UK as credit markets become increasingly fragile. The easy financing conditions that supported a series of debt-fueled takeovers of British companies last year have mostly come to an end.