Boots offloads pension scheme in £4.8bn deal

A deal to sell Boots could have taken a step closer after its owner, Walgreen Boots Alliance, offloaded the Nottingham pharmacy chain’s pension scheme to insurer Legal & General (L&G).

L&G will take on responsibility for all of Boots’ 53,000 retirees in the UK’s largest-ever pension deal, valued at £4.8bn.

Boots said it will bring forward around £170mn of already committed payments to the pension scheme. The deal includes Boots paying extra contributions worth about £500mn.

Legal & General has a long-standing relationship with Boots, having provided investment management services to the Scheme for over 20 years. This buy-in begins the end of a de-risking process that the scheme first started in 2001.

Cardano was the strategic advisor to Walgreens Boots Alliance and lead broker for the transaction, while Baker McKenzie provided legal advice. Aon was strategic adviser, lead investment adviser and broker for the transaction representing the Trustee, while Sackers provided legal advice. Slaughter and May and Simmons & Simmons provided legal advice to Legal & General.

Alan Baker on behalf of Law Debenture, as chair of trustee, Boots Pension Scheme, said: “This agreement with Legal & General gives added protection to our members’ long-term benefits by removing market uncertainty and other financial exposures. We welcome the additional payment from Boots, in addition to the sum it has already committed. As a result, the Scheme will not be reliant on Boots to pay benefits to members and pensions will be protected for decades to come.

“I would like to take this opportunity to thank my fellow Trustee directors and our predecessors, the Scheme officers and advisers for their hard work over many years to reach this positive outcome for our members.”