Westons to buy U.K. pharmacy chain Boots for US$8.9B

A Canadian family, headed by Weston brothers Galen and Fred, is set to acquire the British pharmacy chain Boots for a sum of US$8.9 billion (C$12.7 billion), including debt. Weston Investments, the holding company owned by the Weston family, announced the deal on Wednesday, which is expected to be completed in the first quarter of 2027.

The acquisition includes Boots' retail operations in the U.K. and Ireland, its franchise businesses, its optical division, and the No7 Beauty Company. Additionally, Weston Investments will also take over Boots' operations in Thailand.

Fairfax Financial Holdings Ltd., a Toronto-based holding company, will partner with Weston Investments on the acquisition. Upon completion, Galen Weston will take on the role of Boots' chairman.

Galen Weston expressed his interest in the purchase, stating that Boots is "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 also mentioned that there is potential for improvement, highlighting the benefits of stable long-term ownership, additional capital investment, and renewed focus on customer service.

Boots is a prominent British retailer, comparable to Shoppers Drug Mart, the Canadian pharmacy giant with ties to the Weston family. Weston brothers are known for their success in building Loblaw Cos. Ltd., George Weston Ltd., and owning luxury department store Holt Renfrew in Canada. Loblaw acquired Shoppers Drug Mart in 2014.

The Weston brothers have a stake in Associated British Foods, the parent company of value retailer Primark and the manufacturers of Twinings tea, Mazola oils, Mazzetti vinegars, Ovaltine, and Fleischmann's yeast. It remains uncertain if Boots will return to Canada following the acquisition. If it does, Boots could compete with Shoppers Drug Mart, which currently operates about 1,350 stores in Canada. Boots has approximately 1,800 locations worldwide.

In late September, RBC Capital Markets analyst Irene Nattel had suggested that a Boots acquisition by the Westons was a sensible move, noting that the Weston family's knowledge and expertise in retail pharmacy would be valuable in such a transaction. Boots was rumored to be potentially acquired by the Westons, but RBC Capital Markets did not foresee the deal impacting Loblaw or George Weston significantly.

Upon the completion of the deal, Sycamore Partners and Stefano Pessina and his family will retain ownership of the Boots Group's interests in Farmacias Benavides and Alliance Healthcare Deutschland. A Sycamore Partners spokesperson declined to comment on the transaction during a Wednesday press conference. The Westons secured Boots' management team and over 50,000 employees to focus solely on their business and customers, according to Sycamore Partners' managing director Stefan Kaluzny.