The fate of Boots has been settled not on the public market but in private hands. Wittington Investments, the holding company for the Weston family’s Canadian operations, announced on Wednesday that it will buy the high street retailer from private equity owner Sycamore Partners in a deal worth $8.9bn, or £6.7bn, ending months of speculation about a possible return to the London Stock Exchange.
The sale covers the company’s retail operations in the UK and Ireland, its opticians business, its No7 Beauty brand and its Thailand franchise operations. Fairfax, a Toronto-based holding company, will partner with Wittington to complete the acquisition.
The decision closes a chapter that had raised questions about where responsibility for one of the UK’s biggest high street retailers would ultimately sit. Hopes of a return to the FTSE had been raised earlier this year when Australian pharmacy giant Sigma Healthcare withdrew from talks over a private sale, leaving an initial public offering and the Westons as the two remaining options for the company’s ownership. The Westons’ offer of what they describe as stable, long-term ownership has now prevailed over a public listing.
Galen Weston, chair of Wittington, who will become Boots chairman, said: “We have great respect for Boots’ legacy and leading market position. We see a meaningful opportunity to make a great business even better through stable long-term ownership, further capital investment, and the renewed operating focus required to serve customers with excellence for generations to come.”
Prem Watsa, chairman and chief executive of Fairfax, endorsed the arrangement, saying: “For many years, the Westons have grown and developed some of the most successful retail brands in Canada, including in pharmacy and beauty, and we are very confident that Wittington will be an excellent steward of the Boots business and a terrific partner to Fairfax.”
The transaction also clarifies the position of Stefano Pessina and his family, who built Boots into a worldwide retail empire. They will retain the company’s stakes in Mexican drugstore chain Farmacias Benavides and pharma group Alliance Healthcare Deutschland. Pessina partnered with Sycamore to orchestrate its $10bn acquisition of Boots from Walgreens Boots Alliance in August last year, but has since stepped down from his executive chair role to become a director.
The deal’s governance implications reach back further. Boots became the first ever blue-chip firm to quit the London Stock Exchange in a private equity takeover when it was bought by Pessina and US investment firm Kohlberg Kravis Roberts in 2007. Its proposed return had been framed as a landmark re-listing. Its private sale instead means the company remains outside public-market scrutiny, with accountability resting with its new owners rather than shareholders.
Meanwhile, at Boots itself, leadership continuity is a stated priority. Alex Baldock, who joined as chief executive just last month, said: “For all of our social impact and commercial success to-date, the opportunity ahead is even greater. I look forward to making the most of that opportunity and building a world class Boots for our colleagues, customers, patients, and communities.”
The Westons are among the world’s richest families. Through their UK business they hold a majority stake in FTSE-100-listed AB Foods, which includes fast-fashion retailer Primark. Further detail on the transaction and its background can be found at https://www.cityam.com/billionaire-weston-family-buys-boots-for-9bn/.
For an institution of Boots’ scale, the shift from a prospective public listing to family ownership concentrates oversight in the hands of Wittington and its partners. The coming years will show whether the promised stability and capital investment deliver the stewardship the new owners have pledged.