The family that controls Canada’s largest pharmacy and grocery chains is expanding its influence by acquiring the U.K. drugstore Boots.
Wittington Investments, the holding company of the Weston family, announced on Wednesday that it will buy Boots for $8.9 billion US (approximately $12.7 billion Cdn), which includes debt, from the private equity firm Sycamore Partners.
In addition to Boots’s retail operations in the U.K. and Ireland, Wittington will also take over its businesses in Thailand, its franchised divisions, the optical segment, and the No7 Beauty Company.
Fairfax Financial Holdings Ltd., based in Toronto, will collaborate with Wittington on the deal. After the transaction, which is expected to close in the first quarter of 2027, Galen Weston is set to take the role of chairman of Boots, while Wittington will gain operational control at that time.
Although Weston declined an interview request from The Canadian Press on Wednesday, he expressed in a news release his interest in Boots, calling it “one of Britain’s most enduring businesses, with a rich heritage, a trusted name and a vital role in everyday life across the U.K. and Ireland.”
However, he suggested there is potential for enhancement.
“We see a significant opportunity to elevate a great business further through stable, long-term ownership, additional capital investment, and a renewed focus on operations to serve customers with excellence for generations to come,” he stated.
Boots ranks among the most recognized retailers in Britain and shares many characteristics with Shoppers Drug Mart, the Canadian pharmacy leader associated with the Westons.
A Shoppers Drug Mart pharmacy that is offering COVID-19 vaccines by appointment is shown in Bowmanville, Ontario on Wednesday January 12, 2022. (Doug Ives/The Canadian Press)
The Westons are primarily recognized in Canada for establishing Loblaw Companies Ltd. and George Weston Ltd., as well as owning the upscale department store Holt Renfrew. Loblaw Cos. Ltd. acquired Shoppers Drug Mart in 2014.
Additionally, they have an investment in Associated British Foods, the parent company of the value retailer Primark and the producers of Twinings tea, Mazola oils, Mazzetti vinegars, Ovaltine, and Fleischmann’s yeast.
It remains uncertain whether this acquisition will bring Boots, founded in 1849 and previously operating in Canada, back to the Canadian market. If Boots were to return, it could compete with Shoppers, which operates around 1,350 stores across Canada.
Boots operates approximately 1,800 locations. When rumors of a potential acquisition by the Westons surfaced in late September, RBC Capital Markets analyst Irene Nattel noted that the deal appeared logical.
“We believe the Weston family possesses significant organizational knowledge and expertise in retail pharmacy that would be highly beneficial if a transaction were to occur,” she mentioned in a note to investors dated September 30.
She did not anticipate that a potential deal would significantly impact Loblaws or George Weston, assuming it was executed through the family’s private investment entity Wittington.
As part of the agreement announced on Wednesday, Sycamore Partners, along with Stefano Pessina and his family, will maintain ownership of The Boots Group’s interests in Farmacias Benavides and Alliance Healthcare Deutschland.
“One year ago, we re-established Boots as a standalone entity, enabling its management team and more than 50,000 employees to concentrate exclusively on their business and customers,” stated Sycamore’s managing director Stefan Kaluzny in a news release.
“This transaction is a testament to the efforts they have made and the incredibly promising future that lies ahead.”
