As reported by The Times, Walgreens Boots Alliance, the parent company of high street chemist Boots, is nearing a £7.8 billion ($10 billion) deal to be taken private by US private equity firm Sycamore Partners.
The two parties are aiming to finalise the agreement as early as Thursday, according to reports from The Wall Street Journal.
The proposed takeover would see Sycamore Partners acquire Walgreens Boots Alliance for between $11.30 and $11.40 per share in cash.
This move could potentially reshape the landscape for one of Britain’s most prominent retailers. Walgreens operates over 8,700 stores in the US and 2,000 Boots pharmacies in the UK.
The deal creates uncertainty around Boots’ future, with possibilities including a sale or public listing. Boots has emerged as one of Walgreens’ top-performing assets, with recent quarterly results showing an 8.1% year-on-year increase in retail sales.
The deal could also create a windfall for Walgreens’ billionaire chairman, Stefano Pessina, 83, who is the group’s largest shareholder.
However, he is expected to retain a stake in the business post-acquisition. Sycamore Partners is reportedly planning to separate Boots from Walgreens’ US operations if the takeover succeeds, potentially splitting the company into three distinct businesses: US retail pharmacy, Boots UK, and US healthcare.
Walgreens’ journey to this point has been marked by challenges, including a significant decline in market value over the past five years.
The company previously attempted to go private in 2019 but was unsuccessful. Recent struggles include weak consumer spending, high inflation, and low prescription reimbursement rates.
Despite these hurdles, Walgreens has shown signs of improvement under new CEO Tim Wentworth, who took the helm in 2023. The company recently announced a $1 billion cost-cutting plan and the closure of 1,200 stores over three years.
As news of the potential deal broke, Walgreens’ shares saw a significant increase in New York trading, reflecting market optimism about the company’s future under private ownership.
