Mukesh Ambani, Indian billionaire, is considering a takeover offer for the UK high street retailer Boots. Ambani is the largest stakeholder and chairman of Reliance Industries, a retail-to-energy conglomerate. The Mumbai-based Reliance is collaborating with the US buyout company Apollo Global Management on the potential bid.
The Walgreen Boots Alliance initiated a review of the Boots business earlier this year and apparently put the company up for sale. Boots would expand into India, Southeast Asia, and the Middle East, as well as boost its business in the UK, as part of the acquisition.
According to the idea, Reliance and Apollo would each possess an interest in Boots, however it was unclear if they would be equal partners in the company.
According to the Financial Times, which broke the story first, Boots, which has over 2,200 pharmacies, health and beauty outlets in the UK, might be for up to £6 billion ($7.5 billion).
The Walgreen Boots Alliance and Reliance did not respond to BBC calls for comment right away.
Ambani is the world’s eighth richest person. According to the Bloomberg Billionaires Index, the 65-year-old is also the second richest person in Asia, with a net worth of more than $100 billion. Dhirubhai Ambani, his late father, created a textile factory that grew into Reliance Industries.
It is currently one of India’s largest companies, with operations in petrochemicals, oil and gas, telecommunications, and retail.
Ambani presently owns over 49% of Reliance Industries. The Ambani family already has tens of millions of pounds in holdings in the United Kingdom. Ambani’s Reliance Brands Limited purchased the toy shop Hamleys for an unknown fee in 2019.
Reliance Industries paid £57 million for the iconic British country club Stoke Park last year. For months, the 173-year-old Boots company’s survival has been in doubt.
The Walgreen Boots Alliance, the shop’s US-based owner, revealed in January that it has begun a strategic assessment of the retailer “in line with its previously declared priorities and strategic direction, which include a stronger focus on US healthcare.”
“Further announcements will be made in due course, after the right decision has been reached for Boots’ future and for all stakeholders,” the company said.
Asda’s owners, brothers Mohsin and Zuber Issa, and private equity firm TDR Capital, have reportedly made an initial proposal for Boots.
Mukesh Ambani has been expanding his retail reach by presenting Reliance Industries as a retailing behemoth.
Its retail goals range from high-end apparel to electronics and food.
With over 12,000 outlets across India, the corporation oversees India’s fastest expanding and most lucrative retail industry.
Ambani has also been making investments in order to develop his e-commerce activities and compete with Walmart-owned Flipkart and Amazon.
Reliance Retail received approximately $3.5 billion in international investments in September 2020 alone.
Some of the most significant investments came from Google and Facebook, which assisted Ambani in integrating his telecoms and online retail firms.
And his goals are not limited to India; he is interested in businesses all across the world, including the legendary toy store Hamleys, which he purchased in 2019. Analysts believe Reliance has been lacking a piece of the pharmacy and wellness market, which it aims to achieve through a partnership with Boots.
The number of online pharmacy sellers in India has recently increased, and this potential arrangement would allow Reliance to enter the market more quickly.
However, because large online retailers such as Walmart and Amazon sell everything, businesses with more narrow product lines have failed to gain a foothold in the enormous Indian market.
It will also be fascinating to see how Reliance positions itself in the international pharmacy and wellness markets.
(Adapted from BusinessFast.co.uk)