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AS Watson Eyes Holland & Barrett

AS Watson Group has begun talks for a potential takeover of UK health food chain Holland & Barrett, according to Sky News. Owned by private equity group Carlyle, the chain is part of NBTY, the largest subsidiary of which is nutritional products manufacturer and retailer Nature’s Bounty. Carlyle is reportedly looking to sell the company to a single buyer although also soliciting bids for individual parts of the group.

Holland & Barrett has almost 1,400 stores in 16 countries, with more than half of these in the UK where AS Watson already owns Superdrug, Savers and The Perfume Shop.


A Good Potential Fit

The retail sector abounds with takeovers and consolidation right now, and this is a partnership that sounds like a potentially good fit. Holland & Barrett markets itself as the UK’s leading health retailer and specialises in vitamins and supplements, weight loss, health foods and sports nutrition. With a growing trend for healthy living and natural, organic products it could be a complementary banner to AS Watson's successful health & beauty operations, particularly Superdrug in the UK and Kruidvat in the Netherlands. As part of huge Hong Kong conglomerate Hutchison Whampoa the retailer has funds to invest, but it is unlikely to be the sole bidder.

AS Watson’s leading markets are the Netherlands and the UK, but it present in 20 European countries and expanding successfully through both organic growth and acquisitions. LZ Retailytics estimates that the retailer will generate sales of around EUR4.95 bn by 2022 from EUR4.54 bn in 2016 even excluding any acquisitions. AS Watson has strengths where Holland & Barrett is weak, for instance in ecommerce where it offers mobile apps, blogs, loyalty programmes and digital couponing across all key banners. This will be an interesting one to watch.

Topics: AS Watson