Walgreens has been looking to sell its boots and related No7 Beauty brand since late last year, with a formal review of its options starting in January. However, it withdrew the sale on Tuesday, blaming global financial market conditions that meant potential buyers were finding it difficult to borrow enough money. The value of many of the world’s largest companies has declined during 2022, as investors panic at the prospect of higher interest rates amid rising inflation. Rising interest rates also increase borrowing costs, making debt-financed acquisitions more difficult. Indian billionaire Reliance Industries Mukesh Ambani and US private equity investor Apollo Global Management had submitted a joint 5 5 billion bid for Boots. The interest of the owners of Asda, the brothers Mohsin and Zuber Issa, never led to a formal offer, while the American companies CVC and Bain Capital also rejected a controversial approach. Walgreens had reportedly been looking for up to 10 10 billion when it first put the Boots up for sale as it tried to focus on its US operations. In a statement, Walgreens said it had received “significant interest from potential buyers” but that there had been an “unexpected and dramatic change” in global markets. “As a result of market volatility that severely affects the availability of funding, no third party has been able to make an offer that adequately reflects the high potential value of Boots and No7 Beauty Company.” Walgreens insisted the final sale did not reflect badly on the performance of Boots or No. 7, saying they had a strong return and continued to grow. He said he would invest in companies that have “exceeded expectations despite the difficult conditions”. Subscribe to the Business Email daily email or follow the Guardian Business on Twitter at @BusinessDesk However, Rosalind Brewer, CEO of Walgreens, indicated that the company would consider future acquisition approaches. “It will remain open to all opportunities to maximize shareholder value.” He added that the company had abandoned the sale due to “rapidly evolving and difficult financial market conditions beyond our control”. “It’s an exciting time for these businesses, which are in a unique position to continue to capture future opportunities presented by the emerging healthcare and beauty markets,” he said.
