Alliance Boots: Wikis


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Alliance Boots
Type Private
Founded Alliance Boots 2006
Boots 1849
Alliance Unichem 1997
Founder(s) Jesse Boot - Boots
Merger - Alliance UniChem
Headquarters Zug, Switzerland
Key people Stefano Pessina (Executive Chairman), Andy Hornby (CEO)
Industry Pharmaceuticals
Products Boots
Alliance Pharmacy
No 7 - Makeup
Soltan - Sun cream
Almus - Generic Drugs
Revenue £17.1 billion (08/09)[1]
Operating income EBITDA £1.25 billion (08/09)
Net income No figures
Employees 110,000[2]
Subsidiaries The Boots Company
Alliance UniChem
Boots Contract Manufacturing

Alliance Boots GmbH is a retail pharmacist and pharmaceutical wholesaler in several European countries. It has a turnover in excess of £17 billion. It was formed in 2006 through a merger of the listed British high street pharmacist Boots Group and the pan-European whole and retail pharmacy Alliance Unichem, and was initially a British plc listed on the London Stock Exchange. In 2007 it was bought out in a private equity transaction. In 2008 the trading business was transferred to a Swiss GmbH, which is a wholly owned subsidiary of a British company, AB Acquisitions Holdings Limited, which is owned by the private equity firm Kohlberg Kravis Roberts and the Italian businessman Stefano Pessina, who built Alliance Unichem and is now the executive chairman of Alliance Boots.

Alliance Boots is the leading pharmacy chain in Britain with a 17% market share.[3] Retail operations are carried out under the Boots The Chemists and Alliance Pharmacy brands.Note 1 In terms of retail space, Alliance Boots ranks as one of the largest high street retailers in the UK. Boots is also the largest pharmaceutical wholesaler in the UK through its UniChem subsidiary with a 40% market share.

As the third largest pharmacy chain in Europe, Alliance Boots employs over 110,000 staff and operates more than 3,200 retail stores, around 2,900 of these have pharmacies. Alliance Healthcare, Alliance Boots' pharmaceutical wholesale division, serves over 130,000 pharmacies, doctors, hospitals and health centres via over 370 depots.




Alliance Boots was formed following the merger of a pan-European company, Alliance UniChem Plc, and a British company, Boots Group PLC. Whilst the creation of Alliance Boots was billed as a "Merger" it was technically an acquisition[4] of Alliance Unichem PLC by the larger Boots Group PLC, which then renamed itself "Alliance Boots".

Alliance UniChem was formed at the end of 1997, when Alliance Santé S.A. merged with the UK company UniChem PLC to form Alliance UniChem Plc, and between 1998 and 2006, Alliance UniChem expanded into additional markets throughout Europe and Russia with a widespread program of takeovers, resulting in the company expanding and entering the FTSE 100 share index in 2002.

Alliance Santé stem from Alleanza Salute Italia, which was founded in 1977 by present Alliance Boots Executive Chairman Stefano Pessina. Through his investment vehicle Alliance Santé Participations S.A, at the time of the merger Pessina owned just under 15% of Alliance Boots plc (some 145,300,001 shares) together with 299,108 shares Pessina holds personally. Ornella Barra, Stefano Pessina's partner and director of Alliance Santé Participations S.A owned 559,021 shares. Taken together, the couple owned 15.106% of Alliance Boots plc.

John Boot opened his original shop in 1849 [5]. Boots remained an independent company from its inception through to the merger with Alliance UniChem. Boots' business strategies have generally been successful, as evidenced by its steady, if unspectacular growth over the years. There have, however, been several unsuccessful strategies in pursuit of growth, such as locating Boots stores within larger Sainsbury’s out of town supermarkets [6] at one point even considering the sale of sex toys in Boots stores.[7].

In October 2005 it was announced, after a short period of speculation amongst financial analysts, that Boots would merge with Alliance UniChem in a deal valuing both companies equally and said to be worth around £7 billion. [8]

The merger process completed without any major intervention from the Office of Fair Trading on Monday 31 July 2006, although 96 shops were sold to comply with a condition laid down by the OFT. Technically, the merger was in fact a takeover by Boots, with Boots Group PLC - the holding company of The Boots Company PLC - acquiring the entire share capital of Alliance UniChem and issuing 1.332 Boots Group PLC shares for every 1 Alliance UniChem share held.[9] Upon completion of the process, Boots Group PLC renamed itself to Alliance Boots plc. The benefit of this process allowed The Boots Company PLC and Alliance UniChem Plc to remain intact under one parent company, and eliminating time consuming and expensive legal work which would have been necessary to merge the two companies together into one new company.

Following the merger process, former Boots Group shareholders held 50.2% of the new company, with former Alliance UniChem shareholders getting 49.8%.[9]

Despite the Office of Fair Trading not imposing any restrictive conditions on the deal, the merger only received final approval in February 2006 after the Competition Appeal Tribunal rejected rival firm Celesio's challenge to the deal. Celesio own the Lloydspharmacy Chain.

Acquisition by KKR

On the 25 April 2007, Alliance Boots was approached with a buy-out offer by New York City-based Private Equity firm Kohlberg Kravis Roberts in conjunction with Alliance Boots' then Executive Deputy Chairman, Stefano Pessina, for an estimated £12.4billion.[10] Alliance Boots has become the first company on the FTSE 100 share index to be bought-out by a private equity firm. On 25 July, it was reported that UK banks that are part of the debt syndication have had trouble obtaining buyers for the debt.[11]

On 31 March 2008 Alliance Boots GmbH, of Zug, Switzerland, acquired the trading business from AB Acquisitions Holdings Limited (KKR and Pessina's acquistition vehicle) in exchange for the issue of share capital, and became a subsidiary of that company. The canton of Zug is a favoured location for major company headquarters due to its generous corporate tax regime.


Alliance Boots operations are split into three areas, Retail, Wholesale, and Contract Manufacturing.

Retail operations

A typical Boots store in Gunwharf Quays, UK.
Interior of a Boots store


Boots The Chemists forms the backbone of Alliance Boots retail operations. Nearly all the former Alliance Unichem stores have now been rebranded as Boots.[12] Boots has a history stretching back over 150 years and is a familiar sight on Britain's high streets.

Boots outlets are typically larger than those of Alliance Pharmacy, often occupying prominent high street/city centre locations. Most branches have a pharmacy (only 300 of 3000 stores do not) and focus on healthcare, personal care and cosmetic products, with most stores selling over the counter medicines, many stores also feature traditional photo processing and/or a Kodak picture kiosk where users of digital cameras and camera phones can create professional quality prints. Larger stores usually offer a range of electrical equipment such as hairdryers, curlers and foot massagers, whilst selected stores often offer a range of sandwiches, baguettes, wraps, salads and beverages.

Over the last three years, Boots has opened 48 larger out of town stores[13] to compete with out of town supermarkets and electrical outlets, over the past few years, Boots have suffered intensive competition from the major supermarket chains, especially Tesco and Asda stores featuring a pharmacy and photo processing area, and electrical retailers such as Argos and Dixons selling photographic and beauty electrical items. The pharmacy side of the business is also facing competition from community pharmacies with a stronger heathcare focus, such as Lloydspharmacy, Co-op and Rowlands.

Larger stores typically offer a variety of healthcare services in addition to dispensing prescriptions, such as flu vaccination, Cholesterol screening, weight loss advice, hair retention treatment, smoking cessation advice and products, and Chlamydia testing & treatment (private service). Boots is also a big player in the provision of services to Care Homes across the UK. Optician services are also offered in many larger stores, with Boots providing eye tests along with the sale of spectacles and contact lenses. Boots supplied 800,000 pairs of spectacles in 2005/2006[14]

Boots has a well developed internet site which allows online shopping in the United States, Canada, Norway, Romania, Russia, Taiwan, United Arab Emirates, Kuwait and Thailand.[15]

Advantage Card - billed as the most generous customer loyalty card in Britain, Boots Advantage card has 15,000,000 regular users[16] and users earn 4 points (worth 1p each, so 4p per £1) for every £1 spent. (In Ireland, users earn 4c for every €1 spent).

Alliance Pharmacy

The original Alliance Pharmacies were typically smaller shops[17] focusing mainly on filling prescriptions, selling healthcare products and providing medical advice. Alliance Pharmacies tend to be in less prominent locations, closer to GP surgeries or located in housing estates rather than town centres, in locations more suited to the needs of those needing prescriptions and over the counter medicines.

Since the merger, Alliance Pharmacy stores were re-branded to 'Your Local Boots Pharmacy' and now carry the Boots logo. The changes began in January 2008 and a majority of stores have now been rebranded. [12]

Moss Pharmacies

E.Moss Limited was acquired by UniChem in 1991 and through 2005 was re-branded as Alliance Pharmacy. Any remaining Moss Pharmacy stores will be re-branded as Boots along with the Alliance Pharmacy stores.


Alliance Boots operates a further 400 pharmacies in Norway, the Netherlands, Thailand, Republic of Ireland, Italy and Switzerland (through an associate) and has a presence in various other countries such as Russia, Romania, Canada and the USA through implants in other major retail partners.[16] In Norway the group operates the Alliance Apotek chain with 140 outlets, and the Boots Apotek chain with 60 outlets.

Wholesale operations

Alliance Healthcare

Alliance Healthcare is the backbone of Alliance Boots wholesale and distribution service, with twice daily deliveries to around 5,700 pharmacy shops in the UK alone. Internationally, Alliance Boots distributes drugs and cosmetics to around 125,000 outlets and operates from 380 delivery depots. [16]

In addition to supplying Alliance Pharmacies, the Alliance Healthcare distribution subsidiaries also deliver to NHS central warehouses and hospitals in the UK, along with private hospitals, GP surgeries, local health centres and private pharmacies throughout Europe, Asia and Australasia.


Almus is a brand of generic prescription drugs sold throughout the Alliance UniChem sphere of operations.

Almus is an umbrella brand for the wide range of lower cost generic medicines, which by the end of 2006 will total 200 different drugs and doses. Alliance Boots has placed considerable emphasis on the design of the packaging in an attempt to reduce the number errors by the dispensing chemist and by the patient relating to incorrect dosage which can result in either a dangerous accidental overdose or an equally dangerous under dose. Almus have won numerous awards for the design of their packaging and documentation.[18]

Contract manufacturing operations

Boots Contract Manufacturing

BCM Limited is the manufacturing subsidiary of Alliance Boots and manufactures a range of own-brand and third-party medicines, and cosmetic product ranges such as No 7, Kangol, Toni & Guy, FCUK, Soltan and Botanics. Some are sold through Boots stores whilst others are sold through third party stores such as French Connection and Toni & Guy. Boots Contract Manufacturing has facilities in the UK, Germany, France and Poland.

BCM Cosmétique is the company's manufacturing division in France.

BCM Kosmetik is the company's manufacturing division in Germany.

BCM Specials manufacture bespoke non-licenced medicines for UK hospital and retail pharmacies.

Subsidiary companies

Alliance Boots plc is the direct parent company of The Boots Company plc and Alliance UniChem plc, with The Boots Company plc and Alliance UniChem plc remaining parent companies of their respective subsidiaries. There has been no change in the structure of either company during the merger process.

Financial performance

Boots Group

Year ended Revenue (£m) Profit before tax (£m) Net profit (£m) Basic eps (p)
31 March 2006 * 5,027.4 348.9 303.4 44.5
31 March 2005 5,469.1 427.6 302.4 40.9
31 March 2004 5,325.0 579.9 411.5 52.8
31 March 2003 5,325.2 494.9 301.6 36.0
31 March 2002 5,328.3 595.8 404.3 45.9
31 March 2001 5,220.9 492.2 333.2 37.9
31 March 2000 5,187.0 561.7 399.0 45.0


Alliance UniChem

Year ended Revenue (£m) Profit before tax (£m) Net profit (£m) Basic eps (p)
31 December 2005 9,171.2 278.9 211.3 58.3
31 December 2004 8,898.4 253.0 187.7 52.3
31 December 2003 8,799.3 209.9 N/A 37.3


Corporate governance

As of July 2009 the board of directors are:[20]

  • Stefano Pessina - Executive Chairman
  • Andy Hornby - Group Chief Executive
  • George Fairweather - Group Finance Director
  • Marco Pagni - Group Legal Counsel & Chief Administrative Officer
  • Ornella Barra - Chief Executive, Pharmaceutical Wholesale Division
  • Steve Duncan - Executive Chairman, Health & Beauty
  • Alex Gourlay - Chief Executive, Health & Beauty Division
  • Dominic Murphy - Kohlberg Kravis Roberts
  • Mattia Caprioli - Kohlberg Kravis Roberts
  • Sergio D'Angelo - Kohlberg Kravis Roberts
  • Nick Land - Non-executive Director
  • Chris Britton - Non-executive Director
  • Tony De Nunzio - Non-executive Director
  • Etienne Jornod - Non-executive Director

See also


External links


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