Product details

This is part of a case series. The marriage between Boots the Chemist, the UK's leading retail pharmacy chain, and Alliance UniChem, one of Europe's largest drug wholesalers, was declared a match made in heaven by the two main instigators of the deal; Sir Nigel Rudd, Chairman of Boots, and Stefano Pessina, Executive Deputy Chairman of Alliance UniChem. The £7 billion merger was said to be a true merger of equals and would form a springboard to turn the company into a global health and beauty care company. Both Rudd and Pessina put an enormous amount of time and effort into convincing their respective shareholders to accept the deal. The campaign paid off and the merged company floated on 31 July 2006. Less than eight months later, Pessina took centre stage again for another announcement. In what was seen as a shocking turnaround by many City observers, not to mention by the Alliance Boots investors, he made a formal bid, backed by the private equity firm Kohlberg Kravis Roberts (KKR), to take the company private. It was not simply the speed of the turnaround that was an issue. Pessina was Executive Deputy Chairman of Alliance Boots, managing the strategy and integration of the merged company. He was also the largest individual shareholder with a 15% stake in the company. To complicate matters further, many of the executive and non-executive board members had previous connections with Pessina, as did some of the advisors involved in the proposed deal; Goldman Sachs, acting for Alliance Boots, was simultaneously advising KKR on another deal; and Alliance Boots and KKR were using the same financial public relations firm. It was impossible for investors to know where to turn to get an objective view of the situation. Sir Nigel Rudd, as Chairman of the board, had his work cut out for him.