Boots merger costs come to £42m

The health and beauty retailer Bootsrevealed yesterday its planned merger with Alliance UniChem is likely to cost about £42m.

The lion's share of that amount will be paid to those advising on the £7bn deal.

The investment bank Goldman Sachs is banker to Boots, while its brokers are Merrill Lynch and UBS. Slaughter and May are providing legal advice on the merger. Across the table, Alliance UniChem's banker is Merrill Lynch; its brokers are CSFB, with Allen & Overy giving legal advice.

A prospectus sent to Boots' shareholders yesterday also showed the basic salary of its chief executive, Richard Baker, increased from £663,000 to £696,000 at the start of this month. However, his pay for taking the helm of the merged group will be set by its remuneration committee after the deal closes.

The merger is slated for completion at the end of this month, and will be put to the vote by Boots' shareholders on 4 July.

Those holding Boots shares on 28 July will be paid a "stub" dividend in October of 10p for the part of the year up to the transaction. Alliance UniChem investors will receive 13.25p per share.

Boots reiterated that it expects cost savings of about £100m from the deal, which will create a pharmacy giant with more than £13bn in sales.