Alliance Boots plc, which was founded in July 2006, is the leading drugstore retailer in the United Kingdom and a major pharmaceutical wholesaler in Europe. It was formed through the merger of Boots Group PLC and Alliance UniChem Plc. The company’s retail division is managed by Boots The Chemists (BTC) chain, which includes 2,300 community pharmacies and health and beauty stores within the UK. It also has 300 Boots Opticians practices in the country. Additionally, Alliance Boots operates 400 international pharmacies across several countries including Republic of Ireland, Italy, the Netherlands, Norway, Switzerland, and Thailand.
Boots provides a range of brands including Boots, No7, Soltan, and Botanics. Additionally, Alliance Boots distributes medicines and healthcare products to pharmacies, hospitals, and health centers across various countries such as the Czech Republic, Egypt, France, Germany, Italy, the Netherlands, Norway, Portugal, Romania, Russia Spain Switzerland Turkey United Kingdom.
The company distributes its own line of generic drugs under the Almus brand, which are made by other suppliers. The history of Boots Group can be traced back to a small shop that opened in Goosegate, Nottingham in 1849. Alliance UniChem was formed in 1997 through a cross-border merger of UniChem PLC and Alliance Sante S. A., both companies with roots dating back to 1938 and 1976 respectively.
Jesse Boot, Founding Father
Jesse Boot, born in 1850 in Nottingham, was the first child and only son of John Boot and his second wife, Mary. John Boot, an agricultural laborer, was strongly influenced by the ideas of popular medicine at the time, especially those promoted by Samuel Thompson’s followers from America. Thompson’s remedies, which were rooted in medical botany, were experiencing great success in Britain during that period.
After John Boot’s health broke down, he opened a small shop called the British & American Botanic Establishment in 1849 in Goosegate, Nottingham, selling his own herbal and botanical medicines. His death in 1860 left his widow and her two children dependent on the shop for their livelihood, and Mary Boot continued to run the business with the help of her ten-year-old son. Three years later Jesse Boot left school to work full time in the business. In 1871 Mary and Jesse began operating their business as M and J Boot, Herbalists.
Six years later, Jesse Boot gained complete authority over the shop. During the 1870s, the increasing disposable income of the working class allowed them to buy patent medicines and proprietary medicines similar to those produced by Thomas Holloway and Thomas Beecham. This led to a decline in the popularity of botanical remedies. Despite this shift, the herbal medicines continued to be sold at the Goosegate shop. However, Jesse Boot, who was still young at the time, began expanding the business. He started by introducing a variety of household items, including groceries, which were sold at discounted prices. An advertisement from the early 1870s boasted a stock of over 2,000 different products.
In 1874, Jesse Boot made the decision to start selling proprietary medicines. He believed that if he could offer these products at lower prices than competing chemists, he would have a prosperous future. To achieve this, Boot adopted a commercial strategy of purchasing large quantities of goods from wholesalers and selling them at significantly discounted prices compared to other businesses in the area.
Despite facing resistance from established chemists in Nottingham and other cities where he opened branches, his business grew rapidly. Initially, he struggled to convince wholesalers to supply him with large quantities and to find the necessary funds to pay them. However, he gained the support of influential businessmen and professionals in Nottingham, and with an extensive advertising campaign in the local press, his turnover exceeded his own target. By autumn of 1877, his weekly turnover reached £100.
In the next year, he established a brand-new and larger store in Goosegate. Five years later, he expanded, renovated, and equipped it. In July 1883, Boot transformed his business into Boot and Company Limited, with a nominal capital of 10,000, almost half of which was subscribed by Boot himself. Although turning the company into a limited liability corporation could have allowed external investment, Boot preferred to maintain control in his own hands. He only offered shares to a small circle of close friends and associates during the 1880s. In the meantime, Boot relied on banks for financial support. A decade later, as he started to encourage investments, he only sold preference, nonvoting shares. He made some of these shares available to customers at his shops and to employees, as the cooperative concept appealed to Jesse Boot’s nonconformist and liberal values. Nevertheless, he remained determined to keep control over his business.
Dispensing Prescriptions
At the time, incorporation allowed Boot’s shop to enter a new area of business – dispensing prescriptions.
The House of Lords ruled in favor of limited liability companies in a test case in 1880. This decision, much to the annoyance of the Pharmaceutical Society, granted these companies the right to hire qualified pharmacists or chemists for prescription dispensing. In 1883, Edward Waring became the first pharmacist at Boot’s Nottingham store. With half-price dispensing, the prescription section had a successful beginning.
Company Perspectives
We aim to establish ourselves as the leading global organization in pharmacy-led health and beauty.
Our objective is to expand our retail pharmacy and wholesale businesses worldwide and establish a strong presence in international markets. We are committed to delivering consistent performance and meeting the expectations of our shareholders. Our high standards serve as the benchmark for all stakeholders, both within and outside our Group. Our goal is to lead the industry with our range of brands such as Boots, Almus, No7, Soltan, Alpha, Alvita. We aim to demonstrate unparalleled expertise in formulating, marketing, selling, and distributing our own brands.
We aim to foster a strong team culture and a sense of unity and belonging across the Group. In 1884, we expanded our business by opening branches in Lincoln and Sheffield. Additionally, we started small-scale manufacturing behind our shop in Goosegate. By 1885, our annual turnover had reached 40,000. However, Mr. Boot’s health declined that year, and he briefly considered selling the business. Thankfully, he recovered and during his holiday in Jersey, he met Florence Rowe, the daughter of a bookshop owner.
In August 1886, they got married. In the 1890s, they implemented an ambitious plan to expand. They opened new shops to increase their coverage in England and Wales and also acquired small chains of chemists’ shops. By the end of 1893, Boots was established as the largest company-chemist chain, according to the Chemist and Druggist. In 1888, Boots and Company was restructured as Boots Pure Drug Company Limited, which became the parent company for various subsidiaries like Boots Cash Chemists (Lancs) Ltd. In 1899, they bought the Southern Drug Company and the Metropolitan Drug Company, adding over 60 shops to their chain and making it the largest in the metropolitan area. From 1901 to 1914, they continued opening new shops, reaching a total of 560 by 1914. They even secured prestigious locations such as Princes Street, Edinburgh in 1911 and Regent Street, London in 1912.
While pharmaceuticals and dispensing remained the primary focus of the business, the range of products sold increased, particularly in larger stores that were similar to department stores. This was done to attract middle-class customers and expand its customer base. Florence Boot, who had gained retail experience at her father’s bookshop, played a crucial role in this expansion. She introduced departments dedicated to stationery, books, artists’ materials, and gifts, which were received positively and continued to be her responsibility.
Around 1900, Boots Booklovers Libraries were established and cafes or tearooms were installed in some of the larger stores; both of these changes were well-received by customers. By 1892, manufacturing expanded from a small operation behind the shop to occupy an entire former cotton mill in Nottingham. Jesse Boot’s commitment to the shops’ design and appearance led to the creation and expansion of a building and shopfitting department. A printing department was also opened in 1890 to meet the company’s needs.
The business’s sales growth reflected its increasing success, with sales surpassing 2 million in 1911 and reaching 2.5 million in 1913. The following are key dates in the company’s history: In 1849, John Boot opened a small shop called the British & American Botanic Establishment in Goosegate, Nottingham. In 1877, Jesse Boot, the founder’s son, took over control of the shop. In 1883, Boot incorporated his business as Boot and Company Limited and hired his first pharmacist. In 1888, the company was reconstituted as Boots Pure Drug Company Limited. Finally, in 1920, Boots sold a controlling interest in his company to American Louis K.
In 1923, Liggett and his Rexall group of U.S. drugstores went public with 25 percent of its shares sold on the London Stock Exchange. Later, in 1933, a group of British investors purchased the shares held by American interests. In 1938, a group of retail pharmacists in London came together to form UniChem Limited, which initially focused on wholesaling pharmaceutical products to independent pharmacies. The year 1968 saw Boots acquiring Timothy Whites, followed by assuming a new name, The Boots Company Ltd, in 1971. In 1976, Alleanza Salute was founded in Naples, Italy, which would later become Alliance Sante S.A. In 1982, Boots changed its name to The Boots Company PLC and subsequently launched the Boots Opticians chain in 1983. In 1989, Boots acquired the Ward White group of retail businesses and in the same year, UniChem acquired Moss Chemists. Then in 1995, Boots divested Boots Pharmaceuticals and opened its first store in the Republic of Ireland in 1996. The year 1997 witnessed the merger of UniChem and Alliance Sante to form Alliance UniChem Plc. By 2002, Boots had divested all of the Ward White retailers including Halfords. To further restructure itself, Boots formed a new holding company called Boots Group PLC in 2003. Finally, in 2006…
Boots Healthcare International is acquired by Reckitt Benckiser plc, while Boots and Alliance UniChem merge to create Alliance Boots plc.
Manufacture of Pharmaceuticals Beginning During World War I
World War I presented Jesse Boot, who had been knighted in 1909, with new prospects which he promptly capitalized on, despite his worsening arthritis. He persisted in overseeing the company’s operations. During the late 19th century, the German fine-chemical sector pioneered the research, enhancement, and legal protection of numerous pharmaceuticals (such as aspirin and phenacetin), which were subsequently imported into the United Kingdom.
The outbreak of war caused a shortage of essential fine chemicals, leaving both Boots and the country without a supply. To address this issue, Boots decided to begin manufacturing these chemicals. To do so, he recruited research chemists from Burroughs Wellcome, and in 1915, production commenced at the new plant. Additionally, during the war, the company also began producing saccharin. This expansion in production led to a significant increase in sales, with the company reaching 5 million sales in 1918. In recognition of his contributions to the Liberal Party, Jesse Boot was awarded a baronetcy in 1916. By 1920, he was 70 years old.
Fearing the negative impact of the postwar economic downturn on his business, Jesse Boot, who found it increasingly difficult to manage, privately negotiated the sale of his controlling interest to Louis K. Liggett and his Rexall group of U.S. drugstores. Liggett paid 2.27 million for Boots. Despite remaining as the honorary chairman of Boots until 1926 and later being granted the title of Lord Trent in 1929, Jesse donated a significant portion of the funds to his hometown, specifically to University College, Nottingham. This money was used to finance the construction of buildings on the outskirts of the city.
After retiring to Jersey, Boots passed away in 1931. He had been a part of the Liggett group from 1920 to 1933. However, in 1923, John Boot (the company’s vice-chairman) disagreed with his father’s deal with Liggett and convinced them to sell 25 percent of their shares in Britain. This resulted in Boots shares becoming publicly held and the company being listed on the London Stock Exchange for the first time. In 1928, Drug Inc., a larger US corporation, merged with L.K. Liggett Company. Due to the effects of the American Depression, Drug Inc. decided to sell Boots.
Between 6 million and 7 million, a group of British investors led by Sir Hugo Cunliffe-Owen and Reginald McKenna raised the necessary funds for the purchase. Over the course of 13 years under U.S. ownership, significant organizational changes took place, which persisted even afterwards. In 1920, Boots established two committees comprising senior managers and American representatives to oversee the company (later merged into one). Furthermore, nine territorial general managers were appointed to supervise the 600 shops, while senior managers were sent to the United States for training.
Stock control measures were tightened and improved accounting systems were implemented due to a decline in profitability despite increasing sales. As the postwar slump in Britain subsided, Boots regained prosperity. John Boot, who served as joint managing director, gradually gained control over the company. In 1927, construction began on a new factory in Beeston, near Nottingham, which had been planned for a long time. The factory was completed in 1933. From 1933 to 1953, John Boot, now the second Lord Trent and both chairman and managing director like his father before him, ruled Boots with the same autocratic leadership approach as his predecessor.
During the years leading up to World War II, Boots experienced consistent growth. In 1933, the company opened its 1,000th shop in Galashiels, Scotland. Additionally, in 1936, Boots expanded into New Zealand by opening its first shop there. The 1930s also marked the introduction of new product lines, such as the No7 cosmetics brand and the Soltan suncare line.
Slow Recovery Following World War II
During the years 1939 to 1945, Boots’s manufacturing capacity was focused on aiding the war effort, similar to other British industries. Production of pharmaceuticals, including mepacrine for malaria treatment, became the primary focus.
After the bombing, many of the company’s shops and manufacturing sites were destroyed or greatly damaged. The recovery process was slow due to a shortage of building materials and skills. However, Boots began manufacturing new pharmaceutical products such as antibiotics and cortisone products in 1953. Additionally, the company expanded its business to Kenya, South Africa, Singapore, Australia, and Pakistan during the immediate postwar years. Despite this, Boots faced challenges at home as consumer preferences changed and shoppers sought a greater variety of products.
The second Lord Trent retired in 1954 and passed away in 1956. J. P. Savage, who had been with the company for over 40 years, became the chairman as his former chief assistant. After Savage’s retirement in 1961, the roles of chairman and managing director were split. W. R. Norman, the second Lord Trent’s son-in-law, took over as chairman, while F. A. Cock-field, who had joined the company in 1952 from the Board of the Inland Revenue to implement cost accounting methods, was appointed as managing director.
Acquisition of Timothy Whites in 1967
In 1967, a company reorganization occurred, which involved the formation of a divisional structure. In 1968, Boots acquired the business of Timothy Whites, a well-established competitor with over 600 retail branches. These branches primarily sold drugstore items as well as various consumer goods. Additionally, Timothy Whites operated over 100 shops exclusively selling housewares merchandise. The origins of the Timothy Whites business can be traced back to its founding in Portsmouth in 1848, and it experienced a growth trajectory similar to that of Boots. Furthermore, in 1935, Timothy Whites merged with Taylors Drug Company Ltd., a competitor that had long-standing rivalry with Boots.
The drugstores immediately merged with Boots, but the Timothy Whites Houseware branches continued to operate under their original name until 1983. The acquisition of Crookes Laboratories Ltd. and Crookes Anestan Ltd. in 1971 expanded Boots’ pharmaceutical business, and a proposed merger in the following year aimed at increasing their presence in that field. However, in 1972, the Beecham Company attempted an undesirable takeover of Glaxo. As a defensive move, Glaxo turned to Boots and a hastily arranged merger took place. Both transactions were scrutinized by the Monopolies Commission, and in July of that year, the commission deemed that neither should proceed.
In 1973, Boots attempted to take over the House of Fraser in Europe. The Monopolies Commission reviewed the bid, but before they could make their recommendation, the oil crisis of that year and its impact on the stock market prices caused a disagreement on price. Instead, Boots shifted its focus to the United States. In 1977, they acquired Rucker Pharmacol and renamed it Boots Pharmaceuticals Inc. Additionally, in 1986, Boots purchased the Flint Division of Baxter Travenol for $77 million. In Canada, Boots bought two chains of drugstores in 1977 and 1978. They also obtained 60 percent ownership of Hercules Agrochemical in the United States in 1978. In 1980, this was merged with Fisons agrochemical interests and later sold to Schering in 1983. In Europe, Boots acquired a 50 percent stake in Laboratorios Liade S.A. in Spain in 1979 and purchased 95 percent of Kanoldt in West Germany in 1984. Furthermore, new Sephora shop branches were opened in France.
In 1982, the parent company was renamed The Boots Company PLC. In 1983, they acquired Optrex, a manufacturer of consumer eye products, for 9 million. This acquisition led to the establishment of optical services departments and separate shops. Additionally, they purchased opticians’ chains such as Clement Clarke in 1986, Curry & Paxton in 1987, and Miller and Santhouse in 1989. These developments eventually resulted in the creation of the Boots Opticians chain in 1987. To expand their manufacturing capabilities, Boots also acquired Farleys Health Products, which specializes in baby food and adult nutrition products, in 1986.
Boots introduced Children’s World in 1987 as a retail chain offering clothing, toys, and various products for babies and children under 12. In the subsequent year, the company sold its unprofitable Canadian drugstore chain. In 1989, Boots expanded its domestic drugstore operations through the acquisition of Underwoods Chemists. This was also the year when Boots engaged in a fierce takeover battle to acquire the Ward White group for £900 million, which added the Halfords auto parts chain, the Payless home-improvement chain, and A. G. to Boots’ portfolio.
Stanley, who operates the FADS DIY home-decorating chain, also sold Ward White’s U.S. operations. The acquisition of Ward White was mainly credited to Chief Executive James Blyth. Blyth, who took over the position in 1987, led a restructuring in 1989. This restructuring divided the company’s activities into four operating units: Boots The Chemists, the largest unit consisting of the BTC chain of drugstores; a retail division including Boots Opticians, Children’s World, Halfords, A.G. Stanley, and Payless; Boots Pharmaceuticals, which develops and markets prescription and over-the-counter medicines, health-care products, cosmetics, and toiletries; and a newly created property division, later called Boots Properties, which manages the company’s property portfolio in the United Kingdom, including numerous shopping centers.
Tumultuous Times
Blyth’s efforts to expand Boots into different retail sectors quickly turned negative.
In 1990, the Payless chain merged with the Do It All chain to form a 50-50 joint venture with WH Smith Group PLC. However, both Do It All and FADS saw their sales decline significantly due to a five-year depression in the U.K. housing market. Meanwhile, Boots encountered financial troubles in the early 1990s as it struggled to manage the substantial debt resulting from its acquisition of Ward White. On a positive note, Halfords maintained consistent profitability throughout the 1990s.
Boots Pharmaceuticals division encountered obstacles primarily caused by its limited scale, impeding its competitiveness in the pharmaceutical sector. To address this issue, Boots underwent a restructuring effort in 1991, establishing two distinct operating units. Boots Healthcare International (BHI) assumed leadership of the over-the-counter drugs segment, while Boots Contract Manufacturing (BCM) took charge of producing private label health and beauty items. Consequently, Boots Pharmaceuticals narrowed its focus to prescription drugs.
In 1993, Boots Pharmaceuticals faced failure in its attempt to develop a breakthrough drug called Manoplax for heart treatment due to side effects. Faced with this setback, Boots decided to divest itself from the pharmaceutical unit and sold it to BASF Aktiengesellschaft for around 850 million in early 1995. This marked the end of Boots’ 80-year presence in the prescription drugs industry. During this time, Whitbread PLC’s chairman, Michael Angus, also served as the chairman of Boots, while Blyth assumed the role of deputy chairman.
Also in 1994, Boots sold the Farleys group to H. J. Heinz Company for 94 million. Farleys had been part of BHI but did not fit into the core over-the-counter categories that the unit decided to specialize in, such as pain relievers, cough and throat remedies, and skincare products. In 1995, the BCM unit was strengthened through the purchase of Croda International PLC’s private label cosmetics and toiletries manufacturing businesses in France and Germany. During the 1990s, Boots started to reduce its involvement in diversified retail operations.
The Sephora retail chain in France was sold during the fiscal year 1993-94. In 1996, Storehouse PLC purchased Children’s World. In the same year, Boots acquired WH Smith’s 50 percent share of Do It All for 63.5 million, obtaining full ownership of the troubled chain. Although Do It All was close to becoming profitable by late 1997, there were rumors that Boots would disinvest from the burden it imposed. In late 1997, Boots indeed sold its loss-making Ward White business, A.G. Stanley, to Alchemy Partners for a nominal amount. By early 1998, Boots had separate units for its non-drugstore retail operations: Boots Opticians, Halfords, and Do It All. This seven-unit structure included BTC, BHI, BCM, and Boots Properties. As anticipated, Do It All was sold to Focus Retail Group later in 1998. Meanwhile, Boots The Chemists chain continued to ensure the company’s profitability.
In 1996, BTC announced plans to expand its chain into Thailand and the Netherlands, following its failed venture in Canada. In 1997, six stores opened in Thailand and three in the Netherlands. Additionally, BTC opened its first unit in Ireland in the fall of 1996 and had seven stores there by the end of 1997. In January 1998, Boots acquired the Hayes Conyngham & Robinson drugstore chain, which consisted of 15 stores and was the largest drugstore chain in Ireland.
In April 1998, BTC purchased Connors Holdings Ltd., a privately owned pharmacy chain, for 18 million. This acquisition increased BTC’s presence in the United Kingdom and Ireland, with a total of 25 stores in Northern Ireland, five in the Republic of Ireland, three in England, and one in Wales.
Boots also expanded into the Japanese market in 1999 by forming a joint venture with Mitsubishi.
In addition to these developments, Boots Healthcare International enhanced its position by acquiring Hermal Kurt Herrmann from Merck for 173.6 million ($275.6 million) in 1997. Hermal Kurt Herrmann is a prominent German skincare product manufacturer.
Germany was incorporated into BHI’s European operations, which already consisted of the United Kingdom, France, and Italy.
Refocusing on the Core
In 2000, Blyth retired and was succeeded by John McGrath as the chairman of Diageo plc, and Steve Russell became the new chief executive. Russell had previously held the position of Boots The Chemists’ head since 1995. During Russell’s tenure, Boots decided to downsize its global presence by selling its Netherlands stores to Etos, a subsidiary of Royal Ahold N. V., in 2000 and closing its Japanese stores one year later.
The company changed its strategy and stopped opening retail outlets in international markets. Instead, they focused on promoting the Boots brand globally. They achieved this by setting up branded areas within other retailers’ stores. One example of this was when they started introducing Boots branded areas in 100 A. S. Watson stores in Taiwan in early 2002. In the UK, Boots faced growing competition since the late 1990s when supermarket chains aggressively entered the health, beauty, and drug retail sector.
Additional pressure emerged when U.S. retail giant Wal-Mart Stores, Inc. bought ASDA Group plc in 1999 and expanded the number of in-store pharmacies at the U.K. supermarket chain. In response, BTC reduced its workforce by around 2,000 jobs from 1999 to 2002 and shuttered certain stores, aiming to cut costs by 260 million. Russell also pursued growth by launching Boots WellBeing centers, which provided massage and health and beauty treatments. In May 2002, Boots initiated a four-year remodeling plan that refurbished 300 BTC outlets into six core formats.
In 2000, BHI acquired Clearasil, an acne-treatment brand, from Procter & Gamble for $340 million. In August 2002, Boots sold the Halfords chain to CVC Partners for $671 million. In January 2003, the company restructured itself as Boots Group PLC. Russell resigned as chief executive in May of that year, shortly after closing the Boots WellBeing centers.
Richard Baker took over as the successor in September, having previously served as chief operating officer at ASDA. Sir Nigel Rudd, who was also chairman of Pilkington plc, simultaneously replaced the retiring McGrath as chairman. Rudd had previously held the position of executive chairman at Williams PLC. Under Baker’s leadership, Boots underwent a significant restructuring. Over time, the company’s management had become disproportionately large, prompting Baker to implement a plan in January 2004 to reduce the head office staff from 3,200 to 2,300. This initiative aimed to streamline management and create a more conducive environment for swift decision-making.
BTC outlets have reduced prices on 3,300 products by up to 20 percent to enhance their competitiveness. Alongside this, they have launched a comprehensive remodeling initiative that involves investing in technology to update stores. This includes installing state-of-the-art cash registers at 1,400 stores and revamping information technology and distribution systems. Additionally, BTC has discontinued peripheral services like laser eye correction, dentistry, podiatry, and laser hair removal that were available since 1999.
Further improvement occurred through the opening of new stores, with 24 alone in 2005. In addition, Baker aimed to redirect the company’s focus towards its health and beauty business. In 2005, Boots reintroduced its No7 cosmetics brand and expanded its beauty halls in stores. The substantial investment in infrastructure, along with price reductions, resulted in a decline of profits by 27% in 2004. To prioritize its core retailing operations, Boots revealed intentions to sell its over-the-counter medicine unit, Boots Healthcare International, in April 2005 amidst a slowdown in U.K. retail sales.
By autumn 2005, an additional reason to divest BHI had emerged. Boots needed to sell BHI to finalize its intended merger with Alliance UniChem Plc, which was announced in early October.
Brief History of Alliance Unichem
Alliance UniChem resulted from the merger of UniChem PLC and Alliance Sante S. A. in 1997. UniChem Limited was established in 1938 by a team of retail pharmacists in London, led by Ernest Skues. Initially, they primarily focused on wholesaling pharmaceutical products to independent pharmacies.
UniChem started expanding outside London in the early 1960s, with satellites in Nuneaton and Leeds. In the same decade, the company’s management team and ownership structure were revamped, the product range was expanded to include over-the-counter drugs and toiletries, and the geographic area of coverage was increased. UniChem became a public limited company listed on the London Stock Exchange in 1990. The funds from this listing supported further growth, such as expanding into hospital distribution. Acquisitions were also pursued in the 1990s.
In 1991, UniChem acquired the Moss Chemists chain of 92 pharmacies, which allowed them to establish a strong presence in the retail pharmacy market in the U.K. Over the following years, UniChem expanded the Moss chain to over 500 pharmacies. Additionally, UniChem purchased Bradford Chemists’ Alliance in 1993 and Hall Forster & Company in the following year to grow their wholesaling side. In 1992, they also entered the Portuguese market by acquiring three wholesalers. Later on, UniChem merged their Portuguese operations with Alliance Sante through a joint venture.
UniChem was unsuccessful in a bidding war against Gehe AG for control of Lloyds Chemists in 1997. Meanwhile, Alliance Sante, originally known as Alleanza Salute, encountered difficulties until Stefano Pessina revamped the company. Pessina proceeded to acquire and revamp other wholesalers in Italy, consolidating warehouse software and financing to become the dominant player in Italy’s drug-distribution industry, commanding 15 percent market share by the late 1980s.
Pessina expanded his business beyond Italy, purchasing drug distributors in France, Greece, Italy, Morocco, Portugal, and Spain. He organized these operations under a holding company called Alliance Sante, which was based in Luxembourg. In 1997, UniChem acquired Alliance Sante for around $614 million in stock. The merged company, named Alliance UniChem Plc, became the second-largest drug wholesaler in France, controlling 30 percent of the market. Its headquarters were in the United Kingdom and its stock was listed in both London and Paris.
Alliance UniChem started as Europe’s second largest drug wholesaler and its Moss Chemists unit was the third largest drugstore chain on the continent. The CEO of UniChem continued to hold the same position at Alliance UniChem, while Pessina became the deputy chairman. Revenues in 1998 reached 5.35 billion. Through organic growth and acquisitions, Alliance UniChem rapidly expanded in the late 1990s and early 2000s. The company gained majority control of Safa Galenica S.A., a Spanish wholesaler, in 1998 and entered the Czech Republic by acquiring and combining three regional wholesalers.
Alliance UniChem expanded its presence in the Netherlands by acquiring Interpharm B. V. in 2000. The company also made its entry into the retail markets of Switzerland, Norway, and the Netherlands. In the same year, Alliance UniChem also acquired Holtung AS, the third largest drug wholesaler in Norway.
