Boots investors will own 50.2% of the new company, which will be called Alliance Boots, and shareholders of Alliance UniChem will hold the rest. Under terms of their agreement, Boots will sell its over-the-counter medicines unit, prior to the merger, in a move likely to see the return of more than GBP400 million to its shareholders.
Boots chairman Nigel Rudd said the transaction will help the two companies reduce costs and lower prices. Boots added that profit will fall for a second year due to strong competition from the other over-the-counter healthcare companies such as Superdrug and Tesco.
“This gives us a really good chance to internationalize the group’s brand,” Mr Rudd said in an interview. “It is actually a merger of equals. It genuinely is. The two groups have very, very different skills but complementary skills.”