Walgreens Boots Alliance taken private in $10bn deal

May 2025 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

May 2025 Issue

In early March, Walgreens Boots Alliance (WBA) announced it is to be acquired by private equity firm Sycamore Partners in a deal worth $10bn.

Under the terms of the deal, which is expected to close in the fourth quarter of 2025, subject to customary closing conditions, including approval by WBA shareholders and the receipt of required regulatory approvals, Sycamore will pay $11.45 per share, an 8 percent premium from WBA’s closing share price on 6 March, the day the deal was announced. However, investors could receive an extra $3 per share based on the sale of Walgreens’ primary care business, VillageMD, valuing the business, including debt, at $23.7bn.

The deal for WBA will bring an end to almost a century of trading on public markets for WBA. Walgreens’ market capitalisation has collapsed by 90 percent since 2015 and is now valued at $9.3bn. It has debt and lease obligations of $30bn.

“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,” said Tim Wentworth, chief executive of WBA. “Sycamore will provide us with the expertise and experience of a partner with a strong track record of successful retail turnarounds. The WBA Board considered all these factors in evaluating this transaction, and we believe this agreement provides shareholders premium cash value, with the ability to benefit from additional value creation going forward from monetization of the VillageMD businesses.

“Our trusted brands and deep commitment to our customers, patients, communities and team members have and will continue to anchor our business as we realize our goal of being the first choice for pharmacy, retail and health services. I am grateful to the more than 311,000 team members globally who are fiercely committed to WBA, our customers and patients,” he added.

“For nearly 125 years, Walgreens, and for 175 years, Boots, along with their portfolio of trusted brands, have been integral to the lives of patients and customers,” said Stefan Kaluzny, managing director of Sycamore Partners. “Sycamore has deep respect for WBA’s talented and dedicated team members, and we are committed to stewarding the Company’s iconic brands. This transaction reflects our confidence in WBA’s pharmacy-led model and essential role in driving better outcomes for patients, customers and communities.”

Rumours of a potential deal between WBA and Sycamore first appeared in December 2024. There were reports that if a sale was completed, Sycamore was likely to retain the US retail business and sell or spin off the remainder of the business, which includes UK pharmacy chain Boots. Walgreens first took a stake in Boots in 2012 and completed a buyout two years later.

The Boots business has endured a period of significant uncertainty over the last five years. In 2020, during the coronavirus (COVID-19) pandemic, Boots said it was cutting 4000 jobs, about 7 percent of its workforce, and shutting almost 50 of its opticians branches. In 2023, the company announced the closure of 300 shops, which it completed at the end of last year, as it “evolved” its store estate.

WBA has experienced a 50 percent drop in its share price over the past year. Its market value, which peaked at over $100bn a decade ago, dropped below $8bn before news of the potential takeover first emerged in late 2024. Walgreens reported an $8.6bn net loss in its latest financial year and continues to struggle with sluggish US consumer spending and low reimbursement rates for drugs.

In 2022, WBA attempted to sell Boots for an estimated £7bn but abandoned the plan, deciding that offers from firms including Apollo Global Management undervalued the retailer.

Richard Summerfield