Walgreens Boots Alliance is on the verge of finalizing a deal with private-equity firm Sycamore Partners to take the embattled drugstore chain private in a transaction valued at approximately $10 billion, according to a report.
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 talks, sources told the Wall Street Journal.
The deal is expected to involve Sycamore paying between $11.30 and $11.40 per share in cash, with the potential inclusion of contingent value rights that would allow shareholders to benefit if certain financial benchmarks are met.
If the acquisition proceeds, Sycamore is likely to retain Walgreens’ core US retail pharmacy business while selling or taking public other segments of the company, sources told the Journal.
Discussions between Walgreens and Sycamore first surfaced in December amid the pharmacy giant’s ongoing struggles.
Once a dominant presence in American retail, Walgreens has faced years of financial and operational challenges, with its stock price declining steadily over the past decade.
Last month, Walgreens announced it was shuttering five Southern California locations as part of an overall plan to permanently close 1,200 stores nationwide.
The Chicago-based company which owns 8,700 locations across the country has said that just one in four of its stores are profitable.
A take-private transaction would mark a significant shift for the 120-year-old company, which has been publicly traded since 1927.
At its peak in 2015, Walgreens had a market capitalization exceeding $100 billion.
However, its value had plummeted to under $8 billion by late 2024 as it grappled with shrinking profit margins and mounting competition.
Unlike its chief rival, CVS Health, which expanded into insurance and pharmacy benefits, Walgreens doubled down on its traditional retail pharmacy model.
A foray into primary care did little to reverse its fortunes.
Under CEO Tim Wentworth, the company has since shifted focus, scaling back its healthcare investments and aggressively cutting costs.
Earlier this year, Walgreens shares briefly rallied after reporting better-than-expected adjusted earnings, though the financial strain of widespread store closures remained evident.
In January, the Justice Department sued Walgreens, accusing it of fueling the opioid crisis by improperly dispensing prescription painkillers.
Shortly after, the company suspended its quarterly dividend to preserve cash.
New York-based Sycamore Partners, known for its investments in retail and consumer brands, has previously acquired office-supply retailer Staples and smoothie chain Playa Bowls.
The Walgreens deal, if completed, would mark one of its largest transactions to date, reshaping the future of the pharmacy chain.
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