Boots 'set to merge with Alliance Unichem'

High street retailer Boots looks set to merge with Alliance Unichem in a bid to head off competition from supermarkets selling medicines and toiletries, according to newspaper reports today.

An announcement on the merger of the pharmacy group with Alliance Unichem, which runs Alliance Pharmacies across the UK, could come as early as next week, said a report in the Financial Times.

Boots has 1,400 stores in the UK and sells products in five European countries, while Unichem runs more than 1,200 stores in the UK, Norway, Netherlands and Italy.

The news comes after Boots announced on Thursday that it its sales were down and it was not hopeful of a Christmas spending rush.

Changes to rules governing who can sell contact lenses had led to a round of “savage price cutting” as the company followed the lead of supermarkets like Tesco, said chief executive Richard Baker.

The latest deal could create a high street competitor to supermarkets like Tesco, which now sell more over-the-counter drugs and toiletries than pharmacies.

According to the Financial Times, executives from the two companies are to meet over the weekend to see if they can finalise the agreement.

If successful, it could give Boots an international platform to expand outside the UK.

Alliance Unichem, which has its UK base in Weybridge, Surrey, operates the third largest pharmacy network in Europe.

Boots declined to comment on the reports.