Walgreens to buy major stake in drugstore chain Boots
Walgreens announced today it was looking to buy a stake in the Boots chain of drugstores. The merger would result in the first truly global pharmacy drugstore business with 11,000 stores in 12 countries.
Jeff Horwich: Big international merger news this morning: America's ubiquitous Walgreens is buying a big stake in Europe's ubiquitous Boots chain of drugstores.
Marketplace's Stephen Beard in London is here with some details. Good morning Stephen.
Stephen Beard: Hello Jeff.
Horwich: For Americans who don't know Boots very well, tell me a little more about it. How is it different from Walgreens?
Beard: Well it's not as big as Walgreens, but it is the biggest drugstore chain in Europe, and it does manufacture some health and beauty products, amongst them: ibuprofen, the anti-inflammatory drug and painkiller; and No. 7, the anti-wrinkle agent. Together, these two will form a very powerful force. In fact, the first truly global pharmacy drugstore business with 11,000 stores in 12 countries.
Horwich: So increasing drug prices are a big issue everywhere. You tie these two big companies together -- what effect could this have on the global pharmaceutical market?
Beard: This will be the world's biggest purchaser of prescription drugs, and this will give it tremendous leverage. The group will have real clout. This can't be good news for the global pharmaceutical industry. Drug prices are under intense pressure, especially here in Europe, where cash-strapped governments are making deep budget cuts. And the main purchasers of drugs in Europe and Europe's specialized medicine are governments. So not good news for the drug companies.
Horwich: And quickly: Walgreens is not taking over Boots, but they're buying a big chunk of it. What are the chances this deal gets approved?
Beard: Well, it will have to be approved, but regulators in Europe are at least maybe more favorably disposed than otherwise because this could, as we say, exert more downward pressure on drug prices.
Horwich: Marketplace's Stephen Beard, thank you Stephen.
Beard: OK Jeff.