Walgreens reviving talks to offload £7 billion UK Boots pharmacy chain

The company earlier scrapped its plans to sell the UK high street pharmacy chain after failing to secure the desired valuation for the business

Walgreens Boots Alliance is in discussions about ways to separate its UK-based Boots drugstore chain, and it is considering the possibility of an initial public offering (IPO) in London, Bloomberg News reported on Tuesday.

People familiar with the matter told the publication that the drugstore chain could be valued at about £7 billion ($8.8 billion) in a deal, but the sale process could only start next year at the earliest.

The US company invited bids for Boots last year but scrapped the plan in June 2022 after failing to secure the desired valuation for the business due to a turbulent credit market.

As per the report, Walgreens may invite fresh offers for the UK high street pharmacy chain, but deliberations are still at a preliminary stage and it’s not certain they will lead to a transaction.

Until 2022, Boots has a network of more than 2,000 stores across the UK and Ireland including local pharmacies and large health and beauty shops, and employs over 52,000 people.

Earlier this year, the company announced plans to shut down 300 stores in the country in the next 12 months, mostly those in close proximity to other outlets, in a bid to increase ‘efficiency’.

The high street retailer has already shut a number of stores this year including its branches in Mudge Way, Plymouth; Mount Pleasant Road, Exeter;  Low Moor Road, Kirkby, Ashfield; and Gorleston High Street, Great Yarmouth.

Boots stores that would be shut down in the near future include Cambridge Road, Stanstead (January 6); Northdown Road, Margate, Kent (January 20); Wood Street, Swindon (February 9); and Front Street, Prudhoe (TBC).

Walgreens reached a deal in November to transfer its £4.8 billion ($6 billion) pension plan to financial services company Legal & General Group Plc.

The pension scheme is seen as a stumbling block that had complicated previous efforts to sale the business.