What would be the outcome of Reliance Industries taking a major stake in Walgreens Boots Alliance?

Reliance Industries Ltd is exploring a possible bid for Walgreens Boots Alliance’s global drugstore unit. This will fit into the larger plans of the group to chase deals in Europe, including in the telecom sector. It is estimated that Boots could be valued at £7 billion in terms of enterprise value. However, neither Reliance, nor Boots officials were willing to say anything on the record.

Walgreens has already announced the sale of Boots earlier this year. There has been some interest evinced by private equity firms including Apollo Global Management, TDR Capital, Bain Capital and CVC Capital Partners. These firms were planning to bid as a consortium, but the plans for the same have been shelved, opening the way for Reliance to make an entry in this space. It is not clear if Reliance will bid independently or as part of a consortium.

Walgreens is also looking at the option of a potential IPO of Boots. Incidentally, Boots runs a massive chain of around 2,200 stores in the UK. Most PE bids were well below the floor price that Walgreen was looking at keeping a minority stake in Boots post the transaction. Incidentally, Boots also has smaller operations in Ireland, Norway, the Netherlands and Thailand. For Reliance, it gives them the much needed gateway to Europe.