US retailer Walgreen is to pay $6.7bn (£4.3bn) for a 45% stake in UK rival Alliance Boots.
The cash and shares offer will cement Walgreen's position as the world's biggest pharmacy chain.
Alliance Boots runs a chain of chemists in the UK and more than 3,300 health and beauty retail stores in 11 countries around the world.
The company's wholesale business supplies pharmacies and doctors in 21 countries.As part of the deal, Walgreen would have the option of buying the outstanding Boots shares by 2015, valuing the company at $9.5bn in total.
Profit boost
The Illinois-based company operates 7,890 pharmacies across the United States.Boots is smaller than its US rival but is Europe's biggest seller of health and well-being products. It also has strong internet sales.
Walgreen will pay $4bn in cash and swap more than 83 million shares for its stake in the privately-held Alliance Boots.
As a sweetener to shareholders, Walgreen raised its dividend payment from 22.5 cents to 27.5 cents. The deal still needs to be approved by industry regulators.
The announcement coincided with the release of Walgreen's earnings for the three months to the end of May.
Net profit was $537m, down 11% on the $603m the company made in the same period last year. However, it said the stake in Alliance Boots would boost its earnings in the first year, should the deal go through.
bbc.co.uk
The cash and shares offer will cement Walgreen's position as the world's biggest pharmacy chain.
Alliance Boots runs a chain of chemists in the UK and more than 3,300 health and beauty retail stores in 11 countries around the world.
The company's wholesale business supplies pharmacies and doctors in 21 countries.As part of the deal, Walgreen would have the option of buying the outstanding Boots shares by 2015, valuing the company at $9.5bn in total.
Profit boost
The Illinois-based company operates 7,890 pharmacies across the United States.Boots is smaller than its US rival but is Europe's biggest seller of health and well-being products. It also has strong internet sales.
Walgreen will pay $4bn in cash and swap more than 83 million shares for its stake in the privately-held Alliance Boots.
As a sweetener to shareholders, Walgreen raised its dividend payment from 22.5 cents to 27.5 cents. The deal still needs to be approved by industry regulators.
The announcement coincided with the release of Walgreen's earnings for the three months to the end of May.
Net profit was $537m, down 11% on the $603m the company made in the same period last year. However, it said the stake in Alliance Boots would boost its earnings in the first year, should the deal go through.
bbc.co.uk
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