Walgreens Is Going Private in a $10 Billion Deal After Being a Publicly Traded Company for Nearly a Century Walgreens has agreed to a deal with private equity firm Sycamore Partners.
By Sherin Shibu Edited by Melissa Malamut
Key Takeaways
- Walgreens has agreed to a $10 billion deal to go private with Sycamore Partners.
- Walgreens' market value has dropped from $100 billion in 2015 to about $9.8 billion today.
- Now the company is going private in a new deal as it tries to turn things around.
Walgreens Boots Alliance announced on Thursday that it has agreed to a $10 billion deal to be acquired by private equity firm Sycamore Partners and go private. After years of falling sales and rising costs, the drugstore chain is trying to turn its business around outside the public eye.
According to The Wall Street Journal, Walgreens said that Sycamore would pay $11.45 a share in cash, giving the deal an equity value of around $10 billion. Shareholders could receive an additional $3 a share, according to proceeds from sales of Walgreens' primary-care assets.
The deal will close in the fourth quarter of 2025 and have a total value of up to $23.7 billion, factoring in debt and possible future payouts. When completed, Walgreens' common stock will no longer be listed on the Nasdaq Stock Market, as it will become a private company.
Walgreens has been a publicly traded company since 1927. Over the past decade, the drugstore chain has faced persistent financial challenges that have dropped its market value from $100 billion in 2015 to about $9.8 billion today. According to The New York Times, Walgreens reported a net loss of $8.6 billion for the 2024 fiscal year, triple the loss it reported in 2023.
Related: 'Changes Are Imminent': Walgreens to Shutter a 'Significant' Number of Stores
Walgreens grew to nearly 9,500 U.S. stores in 2018 but has since closed about a thousand locations and is in the early stages of a turnaround plan to close 1,200 more to cut costs. Only 6,000 of its U.S. stores were profitable, Walgreens CEO Tim Wentworth said in an earnings call in October.
The Sycamore buyout would take Walgreens private and give it more room to improve its U.S. business without public scrutiny.
"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," Wentworth stated in a Thursday press release.
Walgreens has also faced legal challenges. In June 2023, interactive display company Cooler Screens filed a lawsuit against Walgreens alleging that the drugstore chain blocked the rollout of its ad-enabled digital cooler doors, breaching a contract signed in 2018. Walgreens contended that Cooler Screens' technology resulted in technical challenges like freezing screens and incorrect product displays.
Related: Walgreens' Battle Over High-Tech Cooler Doors Heats Up
