Jan 17, 2022
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Asda owners believed to be in talks on Boots bid

Jan 17, 2022

Speculation is intensifying over who might buy Boots from its current owner Walgreen Boots Alliance, and the latest names in the frame are the Issa brothers, the retail tycoons who recently took control of Asda.

It's believed that they've held early stage talks about buying the business, which last week was also said to be in the sights of a joint venture between private equity giants Bain Capital and CVC.

However, one complication that could prevent an Issa takeover would be the rising cost of borrowing. The brothers and their private equity partner financed the takeover of Asda using a lot of debt, and with interest rates rising and debt markets tightening, this could be less of an option in 2022.

It's also unclear whether there would be competition concerns. Boots has over 2,000 stores in the UK and Asda is one of the country’s ‘big four’ supermarket chains. As well as selling groceries, it has a big beauty products retail business within its supermarkets and operates pharmacies too.

Newspaper reports also suggested that other supermarket groups could be interested in a takeover of the Boots business. This holds out the intriguing prospect that we could see Boots branches operating within individual supermarket branches, just as Sainsbury's has operated Argos within its giant stores since it bought the business.

That could also mean more Boots branch closures post-acquisition in areas where any potential supermarket owner has a superstore already.

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