A Boots pharmacist in London. (AFP)

London, Oct. 3 (Reuters): British health and beauty group Boots Plc is to acquire Alliance UniChem Plc to create a pan-European drugs retailer and distributor with 3,000 stores and more than ?13 billion ($23 billion) in sales.

Although billed as a merger of equals, Boots top executives Richard Baker and Nigel Rudd will get the top jobs in the new Alliance Boots group, and Boots shareholders will get slightly more than half of the shares, the companies said on Monday.

If successful ? competition concerns and rival bids could yet stymie the move, which is also dependent on shareholder approval ? the deal will create a company worth about ?6 billion on completion next year.

It will add a host of local pharmacies and a powerful distribution network to Boots’s British town-centre outlets, which have suffered from the incursion of the big supermarkets into their traditional strongholds.

Alliance UniChem will get the 156-year old Boots brand for its stores, and reduce its reliance on a drug-distribution market which is coming under intense price pressure from governments looking to cut healthcare costs.

Several analysts were critical of the deal, but shares in both companies made strong gains, partly on speculation that Boots would be open to a counter-offer now that it was effectively up for sale.

“The deal with Alliance UniChem makes little sense and presents a minefield of supply chain problems, but puts Boots firmly into play. We are, therefore, raising our recommendation to hold (from sell),” analysts at Panmure wrote in a research note.

But Boots chief executive Richard Baker tried to dampen down expectations of a counterbid. “There is no other current interest, I cannot be more explicit there with you,” he told reporters on a conference call.

Merger terms

Baker is to take the helm at the new company, while its chairman, Nigel Rudd, is to continue in that role. Alliance UniChem finance director George Fairweather will take up that role in Alliance Boots.