LONDON—Alliance Boots announced today that it has reached agreement to create the second largest optical chain in the U.K., through the merger of its Boots Opticians business with Dollond & Aitchison. The combined business, which will trade as Boots Opticians, will have around 690 practices, including around 210 franchises, and will directly employ more than 5,000 people. According to Alliance Boots, the Dollond & Aitchison practices will, in due course, adopt the Boots Opticians brand.

Dollond & Aitchison is currently owned by De Rigo, a leader in the design, manufacture, and marketing of eyewear, and one of the largest optical retailers in Europe.

Alliance Boots will hold a controlling stake in the new company which will be jointly owned with De Rigo. It will be run as a stand-alone business and it is proposed that, in due course, the headquarters will be based in Nottingham, England. Within the new business, Pradip Patel (currently MD of Boots Opticians) will become chairman and Andy Ferguson (currently CEO of Dollond & Aitchison) will be appointed as managing director.

The transaction, which is subject to the approval of the competition authorities, is expected to be completed in the second quarter of 2009. UniCredit Markets & Investment Banking acted as sole financial advisor to Alliance Boots.

“The merger gives us an excellent opportunity to create a leading force in the U.K. optical market,” said Stefano Pessina, executive chairman of Alliance Boots. “Our plan is to grow and develop the new business, building on the strengths of the Boots brand.”

Maurizio Dessolis, vice chairman of De Rigo, added: “The proposed merger will bring together many complementary strengths. The new business will offer customers excellent service and high-quality eyewear. We are confident that with this extraordinary opportunity for expansion, it will thrive as a leading eyecare and eyewear provider.”

Alliance Boots is an international group with two core businesses, pharmacy-led health and beauty retailing and pharmaceutical wholesaling. The company is privately owned and employs over 110,000 people. It has a presence in over 20 countries operating over 370 pharmaceutical wholesale warehouses delivering to over 135,000 pharmacies, doctors, health centers and hospitals. It operates more than 3,200 health and beauty retail outlets, of which over 2,900 have a pharmacy dispensing more than 210 million items each year.

De Rigo is a leader in the design, manufacture and marketing of high-quality eyewear and is one of the largest optical retailers in Europe through its Dollond & Aitchison and General Optica retail chains. Designed in Italy, the group’s products are distributed in about 80 countries worldwide, primarily in Europe, Asia and the Americas. It distributes its products under its own brand names—Lozza, Police, Sting—as well as under licensed brands such as Celine, Chopard, Ermenegildo Zegna, Escada, Etro, Fila Eyewear, Furla, Givenchy, Jean Paul Gaultier, Loewe and Pirelli. Dollond & Aitchison has over 400 opticians branches in the U.K., including franchises, and General Optica is Iberia’s leading optical retailer.