Seminar Paper of BOOTS (now Alliance Boots) Case Study

Seminar Paper of BOOTS (now Alliance Boots) - Case Study Example The concept of merger immediately took notice because of the inevitable benefits provided by the strategy. Most mergers have expanded their operations and surpassed the achievements that the observers have predicted. Primarily, Alliance Boots is wholesaler and retailer of pharmaceutical goods. The company controls a wide chain of pharmacy spread all across Europe. At present, the company maintains 17% of its total target market (BBC News, 2005). Moreover, Alliance Boots is the largest pharmaceutical wholesaler in UK covering 40% of the market. Its wholesaling and retailing activities are undertaken by subsidiary UniChem. With its vast operations, the company employs approximately 100,000 workers in more that 3,000 retail stores in which 2,700 have pharmacies. In addition, the firm has established 380 retail depots to boost its operations. This has made Alliance Boots one of the largest retailers in terms of retail space (Alliance Boots, 2006). Boots Group Prior to the merger, Boots is bannered by Boots the Chemist, which was regarded as a dominant retail pharmacy operating in UK. Most of the company's outlets are situated in high streets and in highly urbanised areas. From a traditional pharmacist, the company has expanded its business portfolio and ventured to photo processing, opticians, and selling of home appliances. The increasing pressure caused by competition has limited the chances of Boots to improve its performance. It was evident that the company illustrated signs of stagnation and such weak showing eventually created the drawing board that led to the inevitable merger with Alliance UniChem. Alliance UniChem In terms of operational scope, UniChem was bigger and its more established reputation has enabled the firm to occupy markets in Europe. Its major aim is to deliver healthcare service and improve the health situation in most of the locations. The business primarily thrives on retailing and wholesaling pharmaceutical products. UniChem has been relying on its core strategies built on the aspects of expansion, innovation and performance enhancement. Aside from these concepts, the company valued the satisfaction of the customers and other stakeholders. The Merger Because of Boots' financial conditions, it was speculated by financial analysts that the merger with Alliance UniChem is already at work. It was surprisingly announced in October 2005 that the merger was officially created. Part of the announcement was the financial considerations made by both parties. Both companies were valued at 7 billion British Pounds and a split of 50.2 and 49.8 were divided among Boots and Alliance respectively. Basically, the merger was undertaken with the expected intervention of the Office of Fair Trading (OFT). It was reported that 96 stores were sold to comply with the requirements of OFT. In truth, the merger was pictured as a takeover by Boots, which acquire the whole share capital of Alliance UniChem. This was manifested through the issuance 1,332 Boots Group PLC shares for each Alliance UniChem shares held. After this process, the merging firms adopted the name of Alliance Boots PLC. This was done, accordingly, to reduce the time and paper works needed because of the merger. Most important, both firms remained intact only under the supervision of the parent company (OFT, 2001). Objectives Essentially, the purpose of the merger is to combine a supplier in Alliance UniChem and a customer in Boots. The strategy was