The family that controls Canada’s largest pharmacy and grocery chains is expanding its influence by acquiring the U.K. drugstore Boots.
Wittington Investments, the holding company of the Weston family, announced on Wednesday its agreement to buy Boots for $8.9 billion US (approximately $12.7 billion Cdn), which includes debt, from the private equity firm Sycamore Partners.
In addition to Boots’s retail presence in the U.K. and Ireland, Wittington will also take over its operations in Thailand, its franchised businesses, the optical division, and No7 Beauty Company.
Fairfax Financial Holdings Ltd., based in Toronto, will collaborate with Wittington on this acquisition. Following the anticipated closure in the first quarter of 2027, Galen Weston is set to become the chairman of Boots, with Wittington assuming operational control upon completion.
Weston, who declined to speak with The Canadian Press on Wednesday, expressed in a news release that his interest in Boots stems from its status as “one of Britain’s most enduring businesses, boasting a rich heritage, a trusted name, and a vital role in daily life across the U.K. and Ireland.”
Nonetheless, he suggested there is potential for enhancement.
“We perceive a significant opportunity to elevate a great business even further through stable, long-term ownership, increased capital investment, and a renewed operational focus necessary to provide exceptional service to customers for generations to come,” he stated.
Boots ranks among the most prominent retailers in Britain and shares many characteristics with Shoppers Drug Mart, the Canadian pharmacy leader linked to the Weston family.
A Shoppers Drug Mart pharmacy providing COVID-19 vaccinations by appointment is depicted in Bowmanville, Ontario on Wednesday January 12, 2022. (Doug Ives/The Canadian Press)
The Westons are primarily recognized in Canada for establishing Loblaw Companies Ltd. and George Weston Ltd., as well as for owning the luxury department store Holt Renfrew. Loblaw Cos. Ltd. acquired Shoppers Drug Mart in 2014.
Additionally, they hold a stake in Associated British Foods, the parent organization of value retailer Primark, and the producers of Twinings tea, Mazola oils, Mazzetti vinegars, Ovaltine, and Fleischmann’s yeast.
It remains uncertain whether this acquisition will lead to the return of Boots, originally founded in 1849 and once operating in Canada, to the country. Should Boots make a comeback, it may compete with Shoppers, which operates approximately 1,350 locations in Canada.
Boots operates approximately 1,800 outlets. When rumors of a potential acquisition by the Westons surfaced in late September, RBC Capital Markets analyst Irene Nattel noted that the deal made logical sense.
“We believe there is significant organizational insight and expertise in retail pharmacy within the Weston family of businesses and investments, knowledge that would be incredibly valuable if a transaction were to materialize,” she remarked in a note to investors dated September 30.
She did not anticipate a potential deal would significantly impact Loblaws or George Weston, assuming it was executed through the family’s private investment branch, Wittington.
As part of the agreement revealed on Wednesday, Sycamore Partners, together with Stefano Pessina and his family, will maintain ownership of The Boots Group’s interests in Farmacias Benavides and Alliance Healthcare Deutschland.
“One year ago, we re-established Boots as an independent entity, allowing its management team and more than 50,000 employees to concentrate exclusively on their business and customers,” stated Sycamore’s managing director Stefan Kaluzny in a news release.
“This transaction is a reflection of the accomplishments they have achieved and the incredibly promising future that lies ahead.”