US Takeover of Boots

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US Takeover of Boots

• International Marketing
• Professor Bindroo

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• Presented by
• Jennifer Black
• Shannon Heidenreich
• Mary LaPointe

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Company Background
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Company Background

• Founded by John Boot 1849
• Gained recognition by providing herbal remedies
  for soldiers

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Company Background

• Now sells everything from otc pharmaceuticals to
  Christmas gifts

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Company Background

• Highest market share in UK
• How they got there
• 1849 Founded in Goose Gate, Nottingham
• 1870 Jesse Boot headed management
• 1900 Expansion Success
• 1930 More than 1,000 stores
• 1936 First overseas store opened in New Zealand
• 2007 More than 1,500 stores and sells in 14
  countries

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Company Background

• British tradition and institution
• Member of society
• Funded University of Nottingham
• Served the Royal Family

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American Takeover
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American Takeover

• A bid has been placed by Stefano Pessina, a
  nuclear scientist, and his American backers KKR
  for 10.1b(pounds)
• Currently Boots is suffering due to increase
  competition from Supermarkets

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American Takeover

• Mr. Pessina already has a 15 stake in the parent
  company Alliance Boots
• Kuhlberg Kravis Roberts (KKR) reason for
  investment is long-term growth and they plan to
  continue to invest in Alliance Boots
• This kind of entrance strategy is known as
  Foreign Direct Investment

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Foreign Direct Investment
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Foreign Direct Investment

• FDI occurs when a firm makes direct investments
  in facilities to source, produce, and/or market a
  product in a foreign country.

• It is the most extensive form of participation
  and stems out of the desire to have full control.

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Causes for Concern
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Causes for Concern

• As put by Alan Simpson, also known as the Labour
  Mp for Nottingham South "What has taken decades
  to build up can take moments to destroy if you're
  interested simply in asset-stripping. We have no
  rules in place for takeover bids. This is
  treating the economy like a car-boot sale.
• Another quote states "What we get when we move
  into a transnational basis is a loss of place and
  a disconnection with the community."

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Causes for Concern

• Boots only funds projects benefiting people
  within the Nottinghamshire community.
• Also a recent announcement was made of the loss
  of 300 jobs alone at its Nottingham factory last
  week

• Private equity
  companies have poor records on long-term
  investment in the firms they take over.

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Causes for Concern

• In Summary Boots has a long British tradition
  that could be potentially threatened by new
  foreign ownership both from the financial aspects
  as well as from an emotional standpoint.
• What do you think?

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Questions and Answers
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The End