AFTER a long drawn-out courtship, Boots and Alliance UniChem will finally complete their merger tomorrow.

So, apart from some pretty horrendous advisers’ fees, what have Boots chairman Sir Nigel Rudd and Stefano Pessina, the founder and deputy chairman of Alliance Unichem, created by merging the two companies? Despite initial City scepticism, many have now been won over by the logic of the deal. In a recent note to clients, entitled The drugs do work, Jamie Isenwater, a retail analyst at Deutsche Bank, argued the deal made strategic and financial sense.

The combination of Alliance’s wholesale business, which distributes medicines across Europe, and Boots’ retail experience diversifies the business. Boots will no longer rely on the volatile and competitive retail market — which is constantly under attack from supermarkets.

The combined group will also be even better placed to benefit from deregulation in continental Europe, which will finally open up the pharmacy market to multiple operators.

Analysts also believe that the synergy benefits will be well in excess of the £100m that has been promised — with some forecasting that the combined group could extract up to £160m in savings, although the company is far more cautious.

But as shareholders in Wm Morrison have discovered, no merger is risk free. Boots executives insist they will avoid the same mistakes: there will be no rush to integrate Alliance’s Moss stores and Boots’ retail operation.

But key to success will be Pessina’s relationship with Richard Baker, chief executive of the combined group. With a 16% stake in the combined group, it will be hard for Pessina not to interfere if things don’t go to plan.

IGM

SHARES in IGM, the Chinese mobile-technology company that provides entertainment and messaging services for mobile operators, fell 20% on the first day of trading back in May — slipping 10½p to close at 41p. It was hardly the most auspicious AIM debut — but things have got a lot worse since.

IGM listed in a blaze of publicity and promised much: observers claimed that the company “hit all the stock-market buzz words”.

Unfortunately, the reality has proved to be somewhat different. Just six weeks after listing, IGM issued a profit warning and the share price collapsed, plunging 28% on the day to 15½p. They have shown no signs of bouncing back and closed at the same price on Friday.

IGM has been hit by changes to mobile-phone regulations in China.

The move obviously caught the company, and those who brought IGM to the market, off guard — despite filling six pages of the prospectus with numerous “risks factors” neither IGM nor anyone involved in the float actually foresaw the changes to the regulations.

IGM has proved to be a disaster for investors. In fact, the only winner to date has been Libertas Capital, which picked up more than £400,000 in fees when it brought IGM to the market.

The London Stock Exchange is rightly proud that AIM is attracting ever- increasing numbers of foreign firms.

But if the market is to cement its position as the international home for fast-growing firms, the exchange needs to focus on the quality of companies as well as the quantity.