Boots, which began as a corner shop herbalist in Nottingham in 1849, is set to be taken over by the US drugstore giant Walgreens.
The household name US retailer is paying a staggering £4.3billion for a 45per cent stake in Boots, which employs 75,000 people in the UK.
The company plans to buy the rest of Boots by 2015, creating the first global pharmacy business.
Takeover: A 45 per cent stake in Boots has been sold to U.S. giant Walgreen for £4.3bn as the company attempts to create the world's first global pharmacy
The trans-Atlantic deal will bring together more than 170,000 pharmacies, doctors, health centres and hospitals in 21 countries.
There are fears that the American company will shift control of the merged business to the US, effectively killing off a British high street icon.
However, the Italian executive chairman, Stefano Pessina, who co-owns Boots with an American-based private equity business, insisted it would survive the merger.
‘How could I do a deal to kill Boots?’ he said.
‘I have done a deal to make Boots more visible, more international, to create a lot of new markets for Boots and for the manufacturing facility at Nottingham.’
Walgreens and Boots insisted that the two brands will be retained and there are no plans for any job losses.
On the positive side, successful Boots beauty brands like No. 7 and Bionics will now be sold through Walgreens outlets across the USA.
As a result, Boots may need to employ more people in Nottingham and its other manufacturing centres, rather than less.
While this may reassure UK staff, the recent evidence of US firms taking over British companies is not encouraging. For example, when Kraft bought Cadbury it reneged on a promise to keep open one British factory.
The British chemist shop chain was established by John Boot in Nottingham 163 years ago.
The business was taken on by his wife and ten-year-old son, Jesse, after his death in 1860 and grew to become a fixture on every high street.
While it is best known as a retailer, Boots has also been heavily involved in the research and manufacturing of drugs, including developing Ibruprofen.
The firm subsequently merged with the European drugs giant Alliance Unichem in 2005 and was bought out by Mr Pessina and private equity firm KKR in 2006.
Deal: Stefano Pessina, left, of Boots shakes hands with Greg Wassen, President and CEO of Walgreens after the deal was announced yesterday
Walgreens has a similarly humble history which can be tracked back to a corner shop drugstore opened by Charles R Walgreen in Chicago in 1901. Today it is the largest drug retail chain in America with 8,300 outlets.
The purchase of the 45per cent stake in Boots involves payment in a mixture of cash and shares in Walgreens.
The new company will be the world’s largest purchaser of prescription drugs and the biggest pharmaceutical and wholesale distribution network.
Walgreens chief executive, Gregory Wasson, said: ‘Our mission is to be America’ s first choice for health and daily living, helping our customers to live well, stay well and get well.
‘Today’s announcement represents an exciting opportunity to accelerate our five core strategies and advance that mission - in the U.S. and now internationally.
‘We are bringing together the strengths and expertise of each company to create a worldwide healthcare platform for the future that can provide innovative ways to address global health and wellness challenges.’
Mr Pessina, who is guaranteed billionaire status by the deal, will get a seat on Walgreen’s board, said: ‘The fit is natural, Walgreens consumer profile in the U.S. is similar to Boots in the UK in many ways - a trusted and much-loved pharmacy brand with a strong heritage.’
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