Rumours and speculation are swirling around potential buyers for Boots, and the Issa brothers have emerged as possible contenders. These brothers, who recently acquired Asda, have reportedly engaged in preliminary discussions regarding the purchase of Boots. This news comes after Bain Capital and CVC, private equity giants, revealed their considerations for a bid for Boots.

However, there are multiple obstacles that the Issa brothers may encounter if they choose to pursue a takeover of Boots. One major concern revolves around the increasing cost of borrowing. During their acquisition of Asda, the brothers heavily relied on debt financing. However, with interest rates on the rise and debt markets tightening, this financing option may not be feasible for them in 2022.

Another issue that may arise is the potential for competition concerns. Boots currently operates over 2,000 stores in the UK, while Asda serves as a prominent supermarket chain. Asda not only sells groceries but also has a significant presence in the beauty products retail sector and operates its own pharmacies. The overlap in offerings between the two companies may attract regulatory attention.

Apart from the Issa brothers, speculation suggests that other supermarket groups might also show interest in acquiring Boots. This opens up the intriguing possibility of incorporating Boots branches into existing supermarket locations. Similar successful integration has been observed with Sainsbury’s, which incorporated Argos into its larger stores following its acquisition of the brand. If a supermarket owner acquires Boots, it may lead to the consolidation and closure of certain Boots branches in areas where there already exists a supermarket superstore.

The potential sale of Boots has sparked significant interest and speculation. As discussions continue, it remains uncertain who will ultimately emerge as the buyer and how this acquisition will impact the future of this iconic British brand.

Useful Links:
1. Boots Official Website
2. Bain Capital’s Official Website