A partnership led by Apollo and Reliance Industries will submit a binding proposal for Boots

According to people familiar with the situation, a consortium led by Apollo Global Management Inc. and Reliance Industries Ltd. has made a binding offer for Walgreens Boots Alliance Inc.’s international operations.

According to the persons, the investor group submitted a proposal for the Boots pharmacy chain this week that is fully backed by committed funding. They did not want to be identified because the information is confidential. According to one of the sources, their proposal values Boots at more over £5 billion ($6.3 billion).

After competing suitors began to have second thoughts, the move might put Apollo and Reliance in pole position to buy Boots. Bloomberg News reported in late May that their major challenger, a group led by Britain’s billionaire Issa brothers and TDR Capital, was considering withdrawing from the competition owing to price differences.


According to those familiar with the situation, Walgreens is looking for a valuation of around £7 billion for Boots. The company has over 2,200 locations in the United Kingdom, as well as private-label brands like No7 Beauty Co. and activities in a few other countries.

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Reliance Industries, which is controlled by billionaire Mukesh Ambani, may be trying to use its knowledge in emerging areas to help the British high street mainstay grow even further. Ambani, one of India’s richest men, is shifting his traditionally refining-focused conglomerate toward sectors that will let him better reach the country’s billion-plus consumers.

The winning bidder could be chosen in the next weeks, according to the sources. According to the people, Walgreens intends to preserve a share in the company after any sale.

The talks are still going on, and there’s no guarantee that they’ll result in a deal. The consortium and Walgreens representatives both declined to comment.

As credit markets become more vulnerable, the Boots sale has become a litmus test for dealmaking in the UK. Last year’s cheap financing circumstances, which aided a succession of debt-fueled takeovers of British companies, have largely ended. Banks that financed Wm Morrison Supermarkets Plc’s private equity takeover had to sell some of the debt at a significant discount.

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