EU clears way for Boots takeover

KKR is one step closer to taking control of Boots

The European Commission has cleared the £11.1bn buyout of Alliance Boots by its deputy chairman Stefano Pessina and Kohlberg Kravis Roberts (KKR).

Regulators said it had received no complaints about the deal and said it posed no antitrust problems.

The deal, the first time a FTSE 100 firm will go private, can now be be completed in July.

KKR first approached the Boots board in March with an offer for the firm. They remain in talks over its pensions plan.

No power

Pensions fund trustees have expressed concern that the debt being taken on by the private equity buyer may jeopardise future pension provision for the 66,000 members of the scheme, including the 16,000 employees who are still making contributions.

The trustees have suggested in the past that a current review of the fund may show a £305m deficit and are pushing for KKR to put up to £1bn extra into the scheme.

They have no power to veto the Boots takeover, but if an agreement with them is not made, it will be the first time that a FTSE 100 company has changed hands without the approval of its pension fund trustees.

Alliance Boots was formed less than a year ago by the combination of the Boots retail chain and drug distributor Alliance UniChem.