Boots, the British drugstore chain, is no longer for sale.
After exploring a sale of Boots and its No7 beauty brand, Walgreens Boots Alliance Inc. has decided to keep it in house. The reason? The macro-economic environment and mounting speculation that the U.S. will fall into a recession.
The company explained that while there had been buyer interest, no third party was able to make an offer that “adequately reflects the high potential value of Boots and No7 Beauty Company,” blaming the financial markets. It added that the decision to retain the businesses has also been supported by the ongoing strong performance and growth of Boots and No7, which have exceeded expectations despite challenging conditions.
“We have now completed a thorough review of Boots and No7 Beauty Company, with the outcome reflecting rapidly evolving and challenging financial market conditions beyond our control,” said chief executive officer Rosalind Brewer. “It is an exciting time for these businesses, which are uniquely positioned to continue to capture future opportunities presented by the growing health care and beauty markets. The board and I remain confident that Boots and No7 Beauty Company hold strong fundamental value, and longer-term, we will stay open to all opportunities to maximize shareholder value for these businesses and across our company.”
Walgreens acquired a stake in Boots, the 173-year-old British nationwide chain in 2012, becoming the majority owner two years later, but pandemic-induced struggles led it to look to off-load the businesses as its new CEO planned to focus on U.S.-based healthcare and wellness.
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It had been widely reported that India’s Reliance Industries and U.S. private equity investor Apollo Global Management made a joint offer for Boots, which operates more than 2,200 stores, valuing it at between $5 billion and $6 billion.
Shares in Walgreens were down almost 3 percent to $40.95 after the announcement. Its chief operating officer Ornella Barra told staffers that more details of its plans for Boots and No7 will be revealed in its third-quarter results Thursday.
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