Walgreens Boots Alliance (WBA) is entering a transformative chapter as it has officially agreed to be acquired by private equity firm Sycamore Partners. This strategic move sees Sycamore set to pay $11.45 per share, translating to an equity value of nearly $10 billion, but could also result in additional payouts for shareholders depending on future business maneuvers.
Details of the acquisition surfaced on March 6, 2025, when the retail pharmacy chain disclosed its plans to transition from being publicly traded to private ownership. This transaction signals significant changes for Walgreens, which has confronted numerous challenges over recent years. Historically, WBA was valued at over $100 billion shortly after its merger with UK-based Boots Alliance, but it has cumulatively shed approximately two-thirds of its market value, facing myriad financial pressures.
Tim Wentworth, CEO of WBA, commented on the acquisition, saying, "While we are making progress on our ambitious recovery strategy, creating significant value will take time, focus, and changes best managed as a private company." By going private, Walgreens aims to regain footing without the constant scrutiny and pressure often experienced by publicly traded companies.
One of the main catalysts for this buyout is the company's strategic adjustment to declining consumer habits and rising operational costs. Walgreens is undergoing major restructuring and has announced the planned closure of 1,200 stores over the next three years to curb expenses and reposition itself for future profitability. This closure process will commence with about 500 locations starting as early as fiscal year 2025.
Of significant note is the potential for shareholders to receive up to $3 more per share from the anticipated sale of Walgreens’ primary care business, VillageMD, which is currently under review. All part of the broader strategic plan includes optimizing Walgreens' services, reflecting the current operational environment's demands.
Despite the impending changes, Walgreens will maintain its operational headquarters near Chicago and will keep its well-known brands, including Boots and Walgreens. Stefano Pessina, who has been prominent as the Executive Chairman and is the company's largest shareholder, will also maintain his minority stake within the newly privatized entity. Pessina’s involvement underlines the continuity aspect as Walgreens transitions through this new phase.
Walgreens’ recent operational history has not been without challenges. Declining reimbursement rates for prescriptions and fierce competition from online retailers like Amazon, Walmart, and Target forced the company to revise its business strategy. The retailer had to implement cost-cutting measures and suspension of its quarterly dividend—an offering it had sustained for over 90 years—in efforts to manage cash flow and operational viability. These moves reflect both the tough economic climate and shifting market dynamics pushing traditional retail models to adapt or risk obsolescence.
Reports indicate Walgreens had already closed about 1,200 stores since its high point of nearly 9,500 following its acquisition of Rite Aid locations back in 2018. Of concerns, the most recent store closures primarily impacted Illinois and California, with significant numbers of retail outlets shutting down just last month. The company previously operated 8,560 locations throughout the U.S. and across several international markets, including Mexico and the United Kingdom. With these cuts, Walgreens expects to reduce its store count to just over 7,000 locations.
It’s clear the transformations at Walgreens are part of broader trends within the retail pharmacy sector. Competing players like Rite Aid have also turned private post-reorganization, indicating a market shift favoring private equity strategies as firms see opportunity within undervalued assets. With Sycamore’s acquisition, questions arise about the future direction of Walgreens’ diverse offerings, particularly its healthcare services, including the expansion of services under VillageMD.
The acquisition is poised to close by the end of the fourth quarter of 2025, pending regulatory approvals. During this time, Walgreens will have the opportunity to solicit competing offers during its 35-day “go-shop” period. Nevertheless, with increasing pressure on traditional retailers and healthcare produce delivery, Sycamore’s motivations appear directed toward maximizing Walgreens' untapped value.
For the time being, Walgreens will not only look to navigate this transitional management phase but also confront the long-term challenges inherent to its current market. While public companies often face pressure from investors to demonstrate immediate profitability, Sycamore Partners will afford Walgreens the latitude needed to execute necessary changes without the drumbeat of public market demands.
With the spotlight on Walgreens as it embarks on this new phase, industry analysts and stakeholders alike will be watching closely how this acquisition impacts the pharmacy chain's operational stability, service provisioning, and overall positioning within the competitive retail healthcare sector.