British cosmetics retailer and manufacturer Boots expands into Latin America

Boots says the business is being acquired for an undisclosed sum, although it is likely to be closely related to the annual revenue that Farmacias Ahumada recorded in 2013 of £835m (US$1.4bn).

The transaction will be an all cash offer from Boots for the outstanding share capital in the business and will be conditional upon the relevant regulatory approval.

Acquisition taps into 1,400 stores in Chile and Mexico​

That revenue is generated through 1,400 stores operating, which consists of approximately 400 stores in Chile and around 1,000 stores for the Mexican arm of the retail chain.

Both the businesses are major players in the respective market, with the Chile operation, operating under the Farmacias Ahumada name being one of the three largest players in the country’s retail pharmacy category.

In Mexico the business operates under the Farmacias Benavides name, and is also said to be the third largest retail pharmacy chain in the country.

First steps into fast-growing Latin American market​

This the first time the company has been able to access the fast-growing Latin America market for cosmetics and personal care and is an opportunity it has been waiting to jump at for some time.

“This acquisition will give Alliance Boots a major presence in the attractive Latin American market, one of our priority areas for investment. It is also a further step towards reaching a truly global footprint,”​ said Stefano Pessina, Alliance Boots executive chairman.

He went on to state the high profile positioning of the retail chains in both the Mexico and Chile markets would serve to strengthen the company’s global portfolio.

“We are confident in the high potential for sustainable growth and value generation that will be unlocked by this acquisition, including the opportunity for consumers in Mexico and Chile to access for the first time leading Boots product brands, such as our renowned skincare and cosmetics ranges.”​

Boots continues its international expansion​

Boots has been steadily expanding beyond the domestic UK market in the past few years, into the Netherlands, Thailand and Ireland, while Boots branded products are sold in countries that include Kuwait, Hong Kong, Switzerland, and latterly, the USA.

In June 2012 US retail giant Walgreens bought a 45% stake in Alliance Boots, which most recently has resulted in the first Boots-branded cosmetic products going on sale in Walgreens stores across New York state, last month.