Blog: Walgreens, Boots deal will interest food suppliers
Michelle Russell | 19 June 2012
In a significant deal for the wider retail industry, the largest drug store chain in the US Walgreens is to buy a 45% stake in UK pharmacy chain Boots. And the transaction will have implications for food suppliers on both sides of the Atlantic.
The US$6.7bn deal will, according to Walgreens, create the first global "pharmacy-led, health and well-being enterprise". It has the option to acquire the remaining 55% of Boots in around three years’ time.
While first and foremost pharmacy retailers, both companies also offer a range of food. Only last month Boots, which sells sandwiches, salads and snacks, had said it was aiming to expand its food range with the launch later this year of lines built around evening meals. It is also reportedly looking at selling wine.
Walgreens sells refrigerated items but also includes confectionery, bakery and snacks, frozen foods, fresh produce and baby formula in its grocery portfolio.
The acquisition may have an impact on both companies' food suppliers.
The obvious benefit for the suppliers is the potential for greater listings, given the expanded geographical reach the acquisition will bring for both companies. However, there is also a risk that suppliers may face a loss of contract if renegotiations take place.
Costs related to the transaction sent Walgreens' third quarter and nine-month earnings sliding yesterday.
The group reported net earnings for the third quarter of US$537m, a 10.8% decrease the prior-year period. Nine-month profits slid 7.8% to $1.77bn.
Third-quarter net sales dropped 3.4%, although nine-month sales edged up 0.6% to $54.6bn.
Click here to view full details of the deal.
The UK's competition regulator has given the all-clear to Hain Celestial's bid to buy UK food and beverage group Orchard House Foods, nine months after the US group announced the deal....
Hershey made an unusual announcement today (20 September), sharing its own sales data for the last four weeks to assuage any possible investor concern over figures released by Nielsen....
As the UK starts to ponder what kind of a relationship it wants with the European Union post-Brexit, EU leaders have been lining up to warn that Britain will not be allowed to "cherry pick" deals and ...
Low food prices continue to hold back inflation rates in the UK as the supermarket price war continues in the face of rising import costs. ...
- Interview: Mondelez eyes sweet success in China
- The benefits of engaging staff in sustainability
- How food companies involve staff in sustainability
- Why Danone is withdrawing Dumex from Vietnam
- How PepsiCo is taking action on palm oil
- 2 Sisters chief Boparan buys Bernard Matthews
- Fonterra says value-added strategy paying off
- B&G Foods acquires ABF's US spice business
- General Mills profit falls as sales disappoint
- MP calls for probe into Bernard Matthews "sale"
- The Big 15: Strategies and Priorities of Top Packaged Food Players in Comparison
- Global Chocolate Confectionery Overview: Challenges, Opportunities and Risks
- Global Foodservice Market 2016-2020
- Global Food and Drinks Closures: Performance and Opportunities
- Fast Food Restaurants in the US - Industry Market Research Report