Walgreens to become private in $10 billion acquisition by Sycamore Partners
Walgreens has been affected by the transition out of the COVID-19 pandemic, pharmacy reimbursement headwinds, lesser consumer spending and a troubled push into healthcare.
Walgreens is about to close an agreement with the private equity firm Sycamore Partners to become a private company, in a transaction valued at approximately $10 billion, according to sources close to the newspaper The Wall Street Journal. Walgreens said the total value of the transaction would be up to $23.7 billion when including debt and possible payouts down the line.
Negotiations are in advanced stages, with both sides aiming to seal the agreement as soon as Thursday — though a last-minute hurdle could still delay or derail talk. Walgreens Boots Alliance said it expects the transaction to close in the fourth quarter of 2025. This deal marks the end of an era: After opening its 100th store in Chicago, Walgreens went public the following year, in 1927.
Walgreens is becoming private
Talks currently revolve around a cash payment of between $11.30 and $11.45 per share, with the possibility of adding contingent value rights that would increase compensation from sales of Walgreens’ primary-care businesses, including Village Medical, Summit Health and CityMD. If the deal goes through, Sycamore would maintain the retail business in the US, while evaluating the sale or IPO of other divisions of the company.
This move would mark a milestone for Walgreens, a company with more than 120 years of history, which once dominated American street corners and even invented the malted milkshake. However, its decline has been unstoppable. From reaching a market value of more than $100 billion in 2015, the company has plummeted to less than $8 billion by the end of 2024, hurt by falling margins in its pharmaceutical business and its failed foray into primary care.
Sycamore Partners 'save' Walgreens
CEO Tim Wentworth has taken drastic measures to save the company, including closing unprofitable stores. But Walgreens' stock fell further in January following a Justice Department lawsuit over its role in the opioid crisis, followed by the suspension of its quarterly dividend. Now, privatization seems to be the only viable solution.
Similar to rivals CVS and Rite Aid, Walgreens has closed hundreds of stores and struggled with declining prescription reimbursements in recent years. Last October, Walgreens announced it was closing approximately 1,200 stores. About one in seven Walgreens currently open will close its doors by 2027. It currently has around 8,500 locations across the United States.