Last week’s Labour Party Conference certainly got the focus right

Last week’s Labour Party Conference certainly got the focus right. Here’s Tony Blair: “I hear people say we have to stop and debate globalisation. You might as well debate whether autumn should follow summer They’re not debating it in China and India. Boots’ 1,400 UK outlets are largely on high streets whereas the Alliance chain is made up of neighbourhood or community chemists.Mr Bakerhas already embarked on a streamlining operation.

This has resulted in more than 1,000 job losses at company headquarters in Nottingham and the decision to exit markets such as dentistry, laser eye surgery and Botox injections that the previous management expanded into.. The combined company will own a total of 2,600 branches worldwide of which 2,300 are in the UK – giving it a 17 per cent share of the retail drug market and putting it ahead of the Lloyds chemists’ chain.Boots believes the enlarged company will be able to compete more effectively with the likes of Tesco and Asda which have been expanding aggressively into healthcare by opening their own in-store pharmacies following the partial liberalisation of the market. Mr Pessina is said to have been the driving force behind the deal, rather than Mr Rudd and the Alliance Unichem chairman Paulo Scaroni, as was suggested at the weekend.To sweeten the deal, Boots plans to return at least £1bn to shareholders from the sale of Boots Healthcare International, its Nurafen, Strepsils and Clearasil manufacturing division.The new company will trade as Boots with Alliance Unichem’s 939 UK branches being converted from the Alliance and Moss brands which they currently trade under. Stefano Pessina, who built Alliance Unichem into the UK’s third-biggest chemist and has a 32 per cent stake in the company, will have a 16 per cent shareholding in the new company and will be deputy chairman.However, a majority of the 13 board directors of the enlarged company will come from the Alliance Unichem side. Permira, KKR and Apax are all thought to be sizing up counter-offers.

“I’m sure we are both effectively takeover targets now,” said one executive involved in the deal. “I suspect a lot of people will be running the numbers.”The merged company, to be called Alliance Boots, expects to make annual savings of about £100m within a two- to three-year period by slashing overheads, cutting out duplication and using its increased purchasing power to strike better deals with suppliers. This is expected to result in at least 2,000 job losses from the combined workforce of 105,000 in areas such as head office, marketing, administration and IT.The deal will take the form of a nil-premium merger with Boots’ chief executive Richard Baker and its chairman Nigel Rudd taking up the same top two posts in the enlarged company. In an attempt to overcome potential competition hurdles, the enlarged group is ready to offload around 15 per cent of the 2,300 chemists’ branches it will own.
But the successful completion of the deal, the biggest in Boots’ 158-year history, faces a potential threat from another quarter with a string of private equity groups contemplating whether to launch rival bids for Boots or Alliance Unichem. The £7bn merger of Boots and Alliance Unichem, announced today, is expected to result in around 2,000 job losses and the disposal of about 350 branches by the new pharmacy and healthcare giant. Telewest shares closed the week up 4.8 per cent at $22.95, giving the company a value of $5.6bn.NTL emerged from Chapter 11 bankruptcy protection just two years ago, and has almost halved net debt over the last year via its $1.4bn rights issue and the sale of its broadcast arm..

However, these are now believed to have been ironed out, leaving the pair ready to close the deal.Shares in NTL, which like Telewest is quoted on Nasdaq in New York, rose almost 8 per cent last week, increasing the value of any share element to the offer. The stock closed the week at $66.80, giving the company a market value of $5.7bn. Telewest is expected to keep Flextech, the television content business, which it has been trying to sell for several months.The Flextech business is thought to have received a number of offers around the £1bn mark. However, analysts have speculated that Telewest never had any intention of selling the division, and was simply trying to demonstrate the value of the business to NTL.NTL and Telewest’s talks were in jeopardy just five weeks ago, as the parties failed to agree on the price, as well as certain tax issues.

Eric Tveter, the company’s chief operating officer, will take home around $9m.
The offer, which is set to comprise a combination of cash and shares, is expected to be pitched at around $23 a share, leaving the seven non-executive directors, who each hold 230,000 shares, with about $5.29m each.The takeover will create a £6.5bn company with 5 million customers, making it the dominant player in the cable television market. Simon Duffy, NTL’s chief executive, has said the new company will provide a serious contender to the “800lb gorillas” in the cable, satellite and digital television markets such as BskyB, Freeview and ITV.Mr Duffy and James Mooney, NTL’s chairman, are expected to hang on to their positions once the merger is complete. Telewest’s chairman Cob Stenham is set to be the largest beneficiary of the deal, cashing in almost $20m of shares and options in the company. The chief executive, Barry Elson, will make around $17m from the takeover, while Neil Smith, the finance director, will receive some $3.5m. It opened its first shop in New Bond Street in London’s West End in 1910 and branched out into the US market in 1921.