Billion dollar Boots

Boots the chemist is being eyed up for a possible takeover bid by a rival US firm.

The UK High Street stalwart, part of the larger Alliance Boots group, could be taken over in months by US rival Walgreens in a £10.5billion deal.

In parallels with the recently rejected Pfizer-AstraZeneca deal, the deal could take millions off Walgreen’s tax bill if operations are moved to the UK, taking advantage of the UK’s lower rate of corporation tax in a strategy called “tax inversion”.

The ease with which giant US firms can move to takeover UK companies is under scrutiny at the moment thanks to Pfizer’s stalking of AstraZeneca. MPs, unions and workers are concerned over the lack of protection for British firms, considering that other countries have policies which are more protective of their home-grown firms.

In 2007 Boots became Alliance Boots in a £12billion deal when American private equity firm Kohlberg Kravis Roberts allied with Italian billionaire Stefano Pessina.

Walgreens bought a 45 per cent stake in the firm in 2013, with the option of buying the remaining stake from February next year. Investors however are keen to strike a deal earlier because of the massive tax savings to be had from tax inversion.

Boots was started as a herbal medicine shop by John Boot in Nottingham in 1849. After he died in 1860 his wife and his son Jessie took over and the business began to grow. Boots is now a retail giant with almost 2,500 stores across the UK, and the successful No7 beauty range. The wider group has a presence in over 25 countries, employing 108,000 people and has a wholesale business.

Sources close to Boots played down the claims, saying that a takeover was: “possible but very unlikely at this stage.’