24th November

Today Walgreens Boots Alliance and the Trustee of the Boots Pension Scheme announced a buy-in with Legal & General. This is the largest single transaction ever undertaken in the UK.  

Cardano acted as the lead broker to the transaction and lead strategic advisor to Walgreens Boots Alliance. Cardano was also involved on all aspects of the transaction including idea generation, structuring, negotiation and execution. The combined specialisms were seamlessly delivered through Cardano’s integrated Risk Solutions proposition to achieve: 

• A strategic outcome that unlocked both corporate and trustee objectives by testing a range of structures dynamically.  
• More secure benefit entitlements through a comprehensive package that included £670m existing and new cash commitment, the termination and replacement of a sizable internal guarantee and insurance protections.
• Excellent pricing in a busy market, delivered through a highly competitive process, with access to the reinsurance market.  
• A tailored approach to illiquids asset exits that delivered transaction certainty and preserved value.

Baker McKenzie provided legal advice to Walgreens Boots Alliance, and Aon and Sackers advised the Trustee.   

Adolfo Aponte, Managing Director Risk Solutions, Cardano Advisory said: “One of the largest pension schemes in the country, the Boots Pension Scheme has a long history of innovation. Today we build on that legacy by leading on a landmark transaction that safeguards the benefits of tens of thousands of members and achieves strategic objectives long sought by all stakeholders.

“We would like to thank Walgreens Boots Alliance and the Trustee. This multi-faceted transaction breaks new ground on a number of fronts, including illiquid asset exits, deferred funding structures and speed of execution. In doing so it has expanded the tools available to corporates and pension schemes that are adapting to a new economic reality of higher interest rates and inflation, as well as the prospect of regulatory change.”   

Darren Redmayne, CEO, Cardano Advisory commented: “I’m incredibly proud of the quality and dedication of the team at Cardano. The Boots Pension Scheme has been involved with a number of ground-breaking transactions over the years and this £4.8bn insurance deal delivers an excellent outcome for both Walgreens Boots Alliance and the members of the Scheme. This was only possible thanks to the Walgreens Boots Alliance’s commitment to working with the Trustees to deliver a long-term solution for its Scheme members and Cardano’s combination of strategic, risk settlement, covenant, and investment expertise.”

Sebastian James, Senior Vice President and Managing Director, Boots said: “We are very pleased to have achieved the gold standard outcome for our pension scheme and to have fully secured the benefits of all members with a highly respected insurer. This will provide greater certainty to both the Scheme members and to Boots, and is an excellent outcome for both parties.”

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.”

• Buyout
• Risk Solutions