Walgreens Boots Alliance Inc., a prominent name in the U.S. retail pharmacy sector, announced a definitive agreement to go private through a significant transaction with Sycamore Partners. The private equity firm will acquire Walgreens for an equity value of approximately $10 billion. This transaction includes both debt and potential future payouts, bringing the total value up to $23.7 billion. Walgreens, which began its journey as a public company in 1927, is set to conclude this chapter by the fourth quarter of this year.
Shares of Walgreens have shown a remarkable uptick, rising over 15% in 2025, although they remain down by more than 48% for the past year and have plunged 70% over the last three years. The company's financial trajectory reflects challenges such as transitioning out of the Covid pandemic, facing pharmacy reimbursement issues, and experiencing softer consumer spending. These factors, combined with a troubled expansion into healthcare, have pressured Walgreens to reconsider its public company status.
In late 2023, Walgreens appointed health-care industry veteran Tim Wentworth as its new CEO. Speaking on the deal with Sycamore Partners, Wentworth emphasized the strategic advantage of transitioning to a private company.
"While we are making progress against our ambitious turnaround strategy, meaningful value creation will take time, focus and change that is better managed as a private company," – Walgreens CEO Tim Wentworth
Sycamore Partners will pay $11.45 per share in cash for the acquisition. This buyout follows a previous offer in 2019 when another private equity firm, KKR, proposed a roughly $70 billion buyout. Although that deal did not materialize, Walgreens has since been navigating through a challenging retail environment.
The deal marks an end to Walgreens' public listing—an era that once saw the company's market value peak at more than $100 billion in 2015. Currently operating around 8,700 locations across the U.S., Walgreens announced plans to shutter approximately 1,200 stores over the next three years, including 500 closures planned in fiscal 2025 alone. Notably, a quarter of its locations are deemed unprofitable.
Following the announcement, shares of Walgreens surged by over 5% in after-hours trading before being halted. The decision to go private is seen as a strategic move to realign resources and tackle financial challenges more effectively without the pressures of public market scrutiny.
Stefan Kaluzny, Sycamore's managing director, expressed confidence in the partnership's potential for reviving Walgreens' fortunes.
"Sycamore will provide us with the expertise and experience of a partner with a strong track record of successful retail turnarounds." – Stefan Kaluzny, Sycamore's managing director
The acquisition by Sycamore Partners is expected to provide Walgreens with renewed focus and strategic direction amidst evolving market dynamics. As both companies work towards closing the deal by the year's end, this partnership aims to steer Walgreens into a new phase of growth and stability.