the times | Tuesday July 28 2020 2GM 33
Business
Ben Martin, Louisa Clarence-Smith
The billionaire behind the American
pharmacy chain that owns Boots is to
step down as its boss, moving away
from the day-to-day running of Wal-
greens Boots Alliance.
Stefano Pessina, 79, the Italian-born
dealmaker, will become executive
chairman once a successor is found to
replace him as chief executive of the
$34.6 billion retailer and wholesaler.
The change at the top will mark the
end of an era for Mr Pessina, who has
run the business since the merger of
Walgreens and Alliance Boots that he
orchestrated five years ago. Boots, the
health and beauty chain, is one of Brit-
ain’s biggest high street retailers, with
2,465 stores and 54,000 staff.
Mr Pessina rose from his father’s
struggling pharmacy business in
Naples to the top of the ladder in corpo-
rate America. He trained as a nuclear
engineer before joining the family busi-
ness in his thirties. He set about rapidly
expanding the company through a se-
ries of acquisitions that spanned
Europe to form Alliance Santé, merg-
ing it with Britain’s Unichem in 1998.
He took his empire-building a step
further when he combined the com-
pany with Boots in 2006 to create Alli-
ance Boots, only to pull off an even
more audacious deal a year later, team-
ing up with the American private equity
group KKR to take it private.
It was the first time a FTSE 100-listed
company had been acquired by a
private equity firm. The later tie-up
with Walgreens took place in two
stages, with Walgreens first buying a
commodities currencies
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Jun 27 Jul 7 15 23 Jun 26 Jul 7 15 23 Jun 27 Jul 7 15 23 Jun 27 Jul 7 15 23 Jun 27 Jul 7 15 23 Jun 27 Jul 7 15 23Britain has upped the ante with the
United States over the terms of a trade
deal by pushing for the lifting of a ban
on lamb and haggis imports and saying
that threats to put tariffs on gin could
derail talks.
Liz Truss, the international trade sec-
retary, criticised “unfair” trade barriers
for exporters to the US yesterday and
cautioned that further duties on spirits
Time to let us sell you lamb and haggis, Truss tells US in trade talks
Callum Jones, Trade Correspondent “would be hugely problematic in terms
of our trade negotiations progressing”.
Speaking as the third round of
transatlantic discussions began, Ms
Truss also signalled that Whitehall was
not chasing cheaper imports on
supermarket shelves, insisting that
food in the UK was already “very
competitively priced”.
The chairman of the government’s
new trade and agriculture commission,
who was speaking alongside Ms Truss,
ruled out chlorinated chicken being
sold in the UK as part of a deal.
The comments raise the prospect of
the talks stalling as soon as next month
— just three months after their long-
awaited launch — if President Trump
moves forward with a threatened esca-
lation in a long-running dispute over
subsidies for Airbus and Boeing. Mr
Trump has proposed raising $7.5 billion
from increasing tariffs on a host of
goods exported by Europe to the US,including beer, biscuits, gin and
Scottish whisky.
Ms Truss listed several restrictions
that she wants repealed. She cited
British lamb — banned in the US for
more than two decades following the
initial outbreak of BSE, the neurode-
generative disease — and haggis, which
is shut out by a long-standing ban on
products including sheep’s lung.
“But there will be other product areas
where we’re seeking the removal ofunfair treatment,” Ms Truss said. “The
other point I would make is the unfair
tariffs that are being levied on our
whisky industry and are also threaten-
ed on our gin industry, as well as the
unfair tariffs on our steel.
“Those are all things that we want to
see removed. I’ve been very clear with
the Americans that if they were to put a
tariff on British gin, that would be
hugely problematic [for] our trade
Continued on page 34, col 5Billionaire goes from Walgreens chief to chairman
Boots boss
Pessina to
step down
45 per cent stake in Alliance Boots in
2012 then snapping up the remainder at
the end of 2014.
Mr Pessina is also thought to have
explored an attempt to take Walgreens
Boots Alliance private last year, in what
would have been the largest leveraged
buyout in history.
The pharmacy group’s market value
has more than halved since Mr Pessina
became chief executive. Elizabeth An-
derson, an analyst at Evercore ISI, said
the share price has lagged as it has come
under pressure from changes in the
pharmaceutical industry and consoli-
dation in US healthcare services that
has squeezed growth and margins.
“We would have preferred this
announcement to be accompanied by
an update on a chosen new chief
executive, but believe the company
should cast a wide net to bring in fresh
perspectives,” she said.
The group has been hit by a disap-
pointing performance from Boots in
the UK alongside competition from
Amazon and lower reimbursement
rates for the prescriptions it fills at its
pharmacies. The company produced a
$1.6 billion operating loss for the third
quarter, compared with a profit of
$1.2 billion last year. It is planning to cut
7 per cent of its UK workforce, shut 48
Boots Optician stores and shed a fifth of
jobs at its head office in Nottingham.
Mr Pessina remains the single big-
gest shareholder in the US-listed group
with a stake of almost 17 per cent and
will replace Jim Skinner as executive
chairman.
Shares in Walgreens closed down
$0.67, or 1.7 per cent, at $39.84.MARTY MELVILLE/AFP/GETTY IMAGESThe Lions’ share Vodafone has signed up as the lead sponsor of the British & Irish Lions for the 2021 tour of South Africa
despite Covid-19 uncertainty. The telecoms group will also provide communications equipment for the rugby team’s tourAstra signs Japan deal for cancer drug
Alex Ralph
Astrazeneca has struck a deal for a
cancer drug potentially worth up to
£4.5 billion with a Japanese peer as it
deepens its investment in potential
blockbuster oncology medicines.
Britain’s biggest pharmaceutical
company has reached a global develop-
ment and commercialisation agree-
ment with Daiichi Sankyo for a target-
ed medicine that could treat multiple
tumour types and is an area of increas-
ing scientific focus for Astrazeneca.
It is the second tie-up between the
companies after a similar potential
multibillion-pound deal in March last
year for a cancer drug called Enhertu,
which was part-funded by Astrazeneca
through a large share placing. Oncolo-gy has become one of Astrazeneca’s key
specialisms and investment in its own
research and development has led to
the successful launch of blockbuster
drugs that has turned around its
portfolio, finances and share price and
propelled it to become one of the most
valuable companies on the FTSE 100,
worth £113.3 billion.
Oncology sales represented more
than a third of Astra’s $23.6 billion pro-
duct revenue last year and were driven
by the launch of three new medicines,
Tagrisso, Imfinzi and Lynparza.
The company was formed through
the merger in 1999 of Astra, of Sweden,
and the British group Zeneca, and it is
building a new £1 billion global research
and development and corporate head-
quarters in Cambridge, a life scienceshub. As part of the cancer development
deal with Daiichi Sankyo, Astrazeneca
will pay $1 billion in stages: $350 million
upon completion of the deal, $325 mil-
lion after 12 months and $325 million
after two years.
Astrazeneca will also pay additional
conditional amounts of up to $1 billion
for regulatory approvals and up to
$4 billion for sales-related milestones.
The companies will jointly develop
and commercialise DS-1062, Daiichi
Sankyo’s antibody drug conjugate,
worldwide, except in Japan, and will
share equally development and com-
mercialisation expenses as well as
profits, excluding Japan.
Shares in Astrazeneca, which have
hit new highs this year, closed down by
4p, or 0.05 per cent, at £86.48.