Stock - Boots
Ambani's Reliance Retail already has an understanding with Boots in India. Image Credit: Bloomberg

Mumbai: Billionaire Mukesh Ambani’s Reliance Industries is weighing a possible bid for Walgreens Boots Alliance’s international drugstore unit. Reliance is in the early stages of exploring the feasibility of an offer for the Boots chain.

Ambani, one of Asia’s richest men, is in the midst of pivoting his traditionally refining-focused conglomerate toward businesses that will better help him tap India’s billion-plus consumers. He’s also been chasing deals in Europe, including in the telecoms sector.

Mukesh Ambani has been chasing acquisitions aggressively for retail-focussed businesses.

Boots could be valued at as much as 7 billion pounds ($9.1 billion) in a sale. Deliberations are ongoing and there’s no certainty Reliance will decide to pursue an approach for Boots.

Shares of Walgreens, which also owns Duane Reade and Mexico’s Benavides, closed up 0.8 per cent on Wednesday, valuing the Illinois-based business at almost $39 billion. Walgreens kicked off the sale of Boots earlier this year. It’s drawn interest from private equity firms including Apollo Global Management Inc. and TDR Capital. It attracted Bain Capital and CVC Capital Partners, who joined forces and were considered early favorites before abandoning their pursuit.

The bidders that remain keen on Boots could also consider teaming up.

Boots could go for an IPO option too
Walgreens is weighing a potential initial public offering of Boots, which runs a chain of roughly 2,200 stores in the UK that includes brands such as No7 Beauty Company, if buyout interest is muted.

Some of the private equity bids have been well below Walgreens’s desired price, increasing the chances of a paused sales process or listing. The US-based company is expected to make a decision in the coming weeks and may opt to keep a minority stake in Boots in any transaction.

Boots also has smaller operations in Ireland, Norway, the Netherlands and Thailand, as well as an optician business and a suite of private-label beauty and personal-care brands that could be included in a sale.

Walgreens has been shifting toward expanding into other healthcare businesses in recent months, as drugstores face increased competitive pressure from and other online retailers. In October, it agreed to invest $5.2 billion in primary-care provider VillageMD, doubling its stake in the company.