Co-op and Boots set to pick up stores from pharmacy Rowlands

Author: By James Thompson

Market sources said that both the Co-op and Alliance Boots are considering acquiring parcels of Rowlands’ 500 stores, but they said the process was at an early stage and played down the chances of either making a bid for the pharmacy chain in its entirety.

Following the collapse of Mr Merckle’s empire, banks swiftly moved to put up for sale the UK arm of the German parent Phoenix.

Phoenix UK owns the 500-strong Rowlands chain of pharmacies, as well as the UK’s third-largest wholesale drugs distribution business and a buying supply group for individual companies, Numark. Market sources said that they expected a purchaser to come forward for Rowlands, which is a well-run business, either separately or as part of a wider acquisition of Phoenix UK. In addition to its stores, Rowlands has an online pharmacy that sells over-the-counter medicines, cosmetics, toiletries and healthcare products on the web. Phoenix UK is headquartered in Runcorn, Cheshire, and has a turnover of ?1.2bn (£1bn).

The Co-operative Group, the food-to-funeral services organisation, declined to comment, but it is thought that it is unlikely it would be interested in acquiring Rowlands, given that it is in the process of buying Somerfield for £1.5bn.

Its pharmacy arm, The Co-operative Pharmacy, has purchased smaller rivals, and parcels of stores, over the past few years to make it the UK’s third-largest pharmacy with more than 800 stores.

Alliance Boots, the owner of the biggest pharmacy chain in the UK, also declined to comment but is understood to be considering acquiring some of Rowlands’ stores, although it is unclear if it has any interest in Phoenix UK’s wholesale businesses.

It is not clear whether Lloyds Pharmacy, the UK’s second-biggest pharmacy chain, has also expressed an interest in Rowlands’ stores.

Phoenix is understood to control about 15 per cent of the British drugs distribution market and delivers to hospitals, pharmacies and dispensing doctors.

Mr Merckle took his own life on 5 January. He was once ranked as one of the richest men in the world with an estimated fortune of £8.5bn, but the loss of control over his once-flourishing industrial empire is thought to have been a factor in his death. In a statement, Mr Merckle’s family said “the powerlessness of not being able to do anything” had been key to his suicide.

Mr Merckle owned a controlling stake in VEM Vermogensverwaltung, Phoenix’s holding company.

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