Bye bye Boots

Reckitt Benckiser’s chief executive officer Bart Becht said the company was “excited” at completing the £1.93 billion (€2.80 billion) acquisition of Boots Healthcare International (BHI).
Becht said ownership of BHI gave Reckitt Benckiser a “platform for additional growth at very attractive margins”. Distribution of the three power brands Nurofen, Strepsils and Clearasil would be “substantially expanded over time”.

“In 2006,” he continued, “our major focus for this business will be on successful integration and extracting the promised synergies, while gradually preparing the business for growth.”
When the deal was announced on 7 October 2005, Becht said it should enhance earnings immediately, and the group was targeting cost synergies of £75 million annually, and £130 million in net working capital synergies by 2008.

Meanwhile, the proposed merger between Boots and UK-based wholesaler and retailer Alliance UniChem announced in October 2005 has yet to be cleared by the Office of Fair Trading (OFT) in the UK. Recent media reports suggested the OFT would announce in early February whether the merger would be referred to the UK’s Competition Commission.

The combined company, Alliance Boots, would have a chain of 3,000 pharmacies and healthcare stores operating in seven European countries. The vast majority of these outlets would be in the UK.

Insiders' view: As with all dinosaurs, extinction beckoned. Boots, more than most, was stuck in the past and has paid the price.

Source:OTC Bulletin