Mukesh Ambani-owned Reliance IndustriesLtd plans to submit a bid for Boots UK, a British medical retail chain, by month-end in a transaction which would cost as much as $10 billion. The acquisition would be the first big ticket overseas investment by Reliance after the company made a string of acquisitions in the American shale gas industry.
The deadline for submitting the bid was on Monday, but was extended following a request from the bidders, said a banker. UKbased billionaires and owners of UK’s retail ASDA Group, Issa Brothers, are also in the race alongwith TDR Capital, a British private equity firm, and are considered to be the front-runners, say bankers.
“This transaction will require a lot of political capital in the British government and the Issa brothers have a lot of clout,” said a banker. “But Ambani and Apollo are also planning an aggressive bid,” the banker said.
A Reliance spokesperson declined to comment.
Bankers said Reliance’s overseas subsidiary has tied up with American private equity giant Apollo Global Management to fund the transaction and is in talks to raise funds from overseas banks. If Mukesh Ambaniwins the race, then it would give the billionaire a formidable presence in the European retail market with access to 2,200 stores. RIL has already acquired online drug seller NetMeds in India and the Boots acquisition will help it launch NetMeds abroad and bring the offline retail chain to India.
The drugstore chain is currently owned by American retail giant, Walgreens Boots Alliance and has presence in Unted Kingdom, Ireland, Italy, Norway, the Netherlands, Thailand and Indonesia.
Analysts said RIL has ample cash to mount an aggressive bid with cash and liquid investments of Rs 2.4 trillion as on December 31, 2021, at a consolidated level. RIL’s financial flexibility was further supported by sizable bank lines, which usually remain unutilised to the extent of 30-50 per cent, according to ratings firm CRISIL.