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Last Updated: Tuesday, 19 June 2007, 12:35 GMT 13:35 UK
Deal reached over Boots pension
Boots shop front
The KKR takeover has been cleared by Brussels
Kohlberg Kravis Roberts (KKR), the private equity firm buying Alliance Boots, has reached a deal with the chemist group's pension fund trustees.

Under the agreement, KKR will pay 418m over 10 years to plug the shortfall in the scheme, and put aside a further 600m as a potential safety net.

The deal comes a day after the European Commission cleared KKR's 11.1bn takeover of Alliance Boots.

The pension fund trustees had earlier criticised KKR for not talking to them.

When KKR's takeover was first announced at the end of last month, the trustees said the private equity firm should have first reached a deal on future pension provision.

Some reports even said the trustees were planning High Court legal action to block KKR's deal if an agreement could not be reached, although this was never confirmed.

'Positive result'

"We are pleased to have reached a satisfactory agreement on the future funding and security of the Boots pension scheme," said John Watson, chairman of the pension trustees.

"All of our members will benefit from the agreement and I am delighted that this period of uncertainty has come to an end with this positive result."

The takeover of Alliance Boots is now set to be completed in July.

It will be the first time that a FTSE 100 firm will be delisted and taken private.

KKR first approached the Boots board in March.

The Alliance Boots pension has 66,000 members, including 16,000 employees who are still making contributions.

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