Sigma Healthcare Abandons $10bn Pursuit of UK Retail Chain Boots

The Australian pharmaceutical group Sigma Healthcare has dropped its pursuit of the UK retail chain Boots, abandoning a takeover estimated to be worth $10bn (£7bn).

Sigma, a wholesaler and retailer, said on Monday that a deal ​to by the high street pharmacy business – which has 1,800 UK stores – would not meet its strategic ‌and capital investment objectives.

Last week it emerged Sigma had been in early talks for a potential acquisition of Boots, adding that it continuously reviews ⁠opportunities that could create shareholder value.

Sigma did not disclose any financial terms, but the Financial Times reported a potential deal could value the ​British health and beauty retailer at about $10bn.

Canada’s Weston family, the dynasty behind the Primark retail chain and worth an estimated near £19bn, has also held talks over a deal for Boots, the FT reported.

Sigma walking away extends a lengthy period of uncertainty for the 177-year-old UK chain, which was originally put up for sale in 2022. Its owner, Walgreens Boots Alliance, was bought by US private equity group Sycamore Partners last year.

Shares in Sigma jumped 6% on Monday. “Investors appear to have breathed a sigh of relief,” said Marc Jocum, a senior product and investment strategist at Global X ETFs.

He said the rally “suggests shareholders would rather see management focus on executing the opportunities already in front of them than ‌pursue another transformational deal of that scale”.

“Sigma has many opportunities for growth and is confident in its established growth strategy, with a primary focus on the Australian market,” the company said in a statement, adding that overseas growth remains one of its key growth pillars.

A deal would ⁠have expanded Sigma’s footprint in the UK market after its acquisition of a ​controlling stake in Greenlight Healthcare ​last month.

Sigma said it had ​considered the opportunity to deepen its push in the region through Boots’s ​established brand and extensive footprint.

Last ‌year, the company ​finalised a merger ​with Chemist Warehouse to create a A$30bn pharmacy and retail group.

The value of the merger was A$8.8bn when the deal was announced in December 2023, but Sigma shares have increased more than threefold in value since then.