Australia's Sigma in early talks to acquire British pharmacy Boots
Potential Acquisition of Boots by Sigma Healthcare
By Roshan Thomas
June 10 (Reuters) - Australia's Sigma Healthcare said on Wednesday that it had engaged in preliminary discussions for a potential acquisition of the British pharmacy chain Boots.
Background and Market Reaction
The pharmaceutical wholesaler and retailer said it continuously reviews opportunities that could create shareholder value, but cautioned there was no certainty any transaction would proceed.
Shares of Sigma Healthcare tumbled more than 5% to hit A$2.76, their lowest closing level since April 28, while the broader Australian benchmark ended 0.7% higher.
Investor Sentiment
"Today's sell-off looks less like a verdict on Boots and more like a reflection of investor caution," said Marc Jocum, a senior product and investment strategist at Global X ETFs.
Details of the Potential Deal
The company's statement followed a Financial Times report that said Sigma was among potential bidders for Boots in a sale process that could value the British health and beauty retailer at about $10 billion.
Strategic Expansion into the UK
A deal would deepen Sigma Healthcare's push into the UK market following its May acquisition of a controlling stake in Greenlight Healthcare.
Recent Mergers and Investor Concerns
Sigma has also recently completed a merger with Chemist Warehouse, and investors are wary that another large acquisition could bring integration, funding, and execution risks, Jocum said.
Boots Ownership and Sale Process
Private equity firm Sycamore Partners, which took control of Boots last year through the $10 billion acquisition of its parent Walgreens Boots Alliance, entered into discussions with potential strategic buyers before Easter, the FT reported.
A potential sale would mark a departure from earlier plans to pursue an IPO in London, the FT said.
Responses and Further Developments
Reuters could not independently verify the FT report.
A representative for Boots declined to comment. Sigma did not immediately respond to a Reuters request for comment on the financial details cited in the FT report.
Previous Reports on Boots' Strategy
In April, Reuters reported that Boots' owners were working with consultants on a strategy overhaul ahead of a potential London IPO as soon as 2027, which also included the possibility of a sale.
(Reporting by Roshan Thomas and Roushni Nair in Bengaluru; Editing by Rashmi Aich and Mrigank Dhaniwala)
