UPDATED: Wittington Investments, a Toronto-based investment company owned by the Weston family, announced this morning it will acquire The Boots Group in the U.K. and its associated businesses for $12.7 billion (US$8.9 billion) from majority owner Sycamore Partners, in partnership with Stefano Pessina and family.

Wittington, the controlling shareholder of George Weston Ltd., is making the acquisition in partnership with Fairfax Financial Holdings Ltd.

Under the terms of the deal, the companies will take ownership of Boots' retail operations in the U.K. and Ireland as well as Boots Opticians, No7 Beauty Company and Boots' franchised businesses in Thailand.

Wittington chairman Galen Weston will become chairman of Boots upon closing, while current Boots CEO Alex Baldock will continue in his role.

"Boots is one of Britain's most enduring businesses, with a rich heritage, a trusted name and a vital role in everyday life across the U.K. and Ireland," Weston said in the announcement this morning.

"We have great respect for Boots' legacy and leading market position. We see a meaningful opportunity to make a great business even better through stable long-term ownership, further capital investment, and the renewed operating focus required to serve customers with excellence for generations to come."

An expanding retail empire

With the acquisition, Wittington takes on over 2,000 Boots locations, with the vast majority situated in the United Kingdom but additional stores in Ireland and Thailand.

Sycamore Partners, in partnership with Stefano Pessina and his family, will retain ownership of The Boots Group's other interests in Farmacias Benavides and Alliance Healthcare Deutschland.

As a holding company for George Weston Ltd., Wittington controls majority interests in Loblaw Companies (L-T) and Choice Properties REIT (CHP-UN-T). 

Loblaw Companies has over 2,800 locations and also owns Shoppers Drug Mart, Canada's largest pharmacy, health and beauty business. Choice Properties REIT holds approximately 700 properties comprising 44.6 million square feet of necessity-based retail.

Wittington has a longstanding connection with the U.K., the announcement notes, as past owner of British luxury department chain Selfridges from 2003 to 2021.

"For over 177 years, Boots has been at the heart of communities providing the best of care to customers and patients as their first choice for health and beauty," the announcement said.

"Wittington plans to continue to invest to build on Boots' strengths and potential, including upgrading stores, optimizing the online experience and supporting the expansion of healthcare services available to customers."

Wittington, Fairfax partnership

In a separate announcement on the deal, Fairfax outlined it will provide up to US$2.3 billion to help fund the purchase. Following the closing, Fairfax is expected to own 50 per cent of the equity of Boots, while Wittington will hold operational control.

Fairfax chairman and CEO Prem Watsa expressed confidence in the partnership. “We are very pleased to partner with Galen Weston and the Wittington team to acquire Boots, a leading historic brand in the UK and Ireland," he said.

"For many years, the Westons have grown and developed some of the most successful retail brands in Canada, including in pharmacy and beauty, and we are very confident that Wittington will be an excellent steward of the Boots business and a terrific partner to Fairfax."

Fairfax is a holding company which, through its subsidiaries, is primarily engaged in property and casualty insurance and reinsurance and the associated investment management. It also holds portfolio investments in the consumer retail sector, including Sleep Country (Canada's largest mattress retailer and Simba Sleep in the U.K.), and The Sporting Life Group.

The transaction is expected to close in the first quarter of next year.