Boots sells Nurofen business

Boots unveiled its second major deal of the week today after raising £1.93bn (€2.8bn) from the sale of its business making Nurofen and Strepsils.

Reckitt Benckiser, the company behind consumer and household products such as Lemsip and Harpic, beat strong competition to win the auction, which raised more than market analysts had been expecting.

Proceeds of more than £1.4bn (€2bn) from the sale of Boots Healthcare International will now be returned to shareholders ahead of the company’s merger of equals with Alliance UniChem – a deal it announced on Monday.

Boots put the Healthcare business up for sale in April after deciding it wanted to focus on the performance of its retail outlets.

Analysts initially put a price tag of £1.2bn (€1.7bn) on the unit, but interest from the likes of GlaxoSmithKline and US healthcare giants Pfizer and Johnson & Johnson drove up the price.

Boots intends to keep £400m (€583m) of the proceeds for investment in the proposed Alliance Boots group, which will have 2,600 stores in the UK and £13bn (€18.9bn) in sales. The cash will be returned to Boots shareholders through a special dividend.

Chief executive Richard Baker said: “Together with the announcement of the proposed merger with Alliance UniChem, this disposal allows us to focus on our plans to create a world class pharmacy-led healthcare group.”

Today’s deal is still conditional on regulatory approvals but is expected to complete in the early part of next year.

Reckitt anticipated cost savings from integrating the business at £75m (€109.3m) a year, although it said it intended to retain the division’s operations at Nottingham, Hamburg in Germany, and Bangkok, Thailand.