Walgreens Boots Alliance, the owner of the Boots pharmacy chain since 2014, has agreed to be acquired by US private equity firm Sycamore Partners for $10 billion (£7.7 billion). Sycamore’s offer, priced at $11.45 per share, represents an 8% premium over Walgreens’ most recent closing price, which is a far cry from the $85 per share peak the company saw in 2015, when its value exceeded $90 billion.
The announcement follows a challenging year for Walgreens, with its share price nearly halving due to tough competition from online retailers and mounting pressure on health insurance payouts. Despite employing over 311,000 people worldwide, the company has struggled to remain profitable, prompting leadership to explore strategic options, including the potential sale of its Boots division when market conditions worsened.
Sycamore Partners, a New York-based private equity firm, has a history of acquiring and managing large retail brands, including US stationery chain Staples, which it bought for $7 billion in 2017, and the healthy-eating restaurant chain Playa Bowls. The firm has also owned Kurt Geiger and attempted to purchase Ted Baker in 2022. Under the terms of the Walgreens deal, a 35-day “go-shop” window will allow Walgreens to entertain and evaluate competing bids before finalizing the agreement.
Walgreens Boots Alliance operates approximately 12,500 pharmacies across the globe, with 1,900 Boots stores in the UK. The Boots chain, which dates back 174 years, has long been credited with revolutionizing pharmacy-led retail in Britain. While it enjoyed strong demand during the 1990s and early 2000s, Boots has faced increasing competition in recent years, along with ongoing financial challenges tied to its parent company’s fluctuating fortunes.
Under Sycamore’s ownership, Walgreens will transition to a private company. CEO Tim Wentworth emphasized that the company’s “ambitious turnaround strategy” would be better managed away from the public spotlight. Sycamore’s managing director, Stefan Kaluzny, expressed confidence in the future of the “pharmacy-led model” and the key role Walgreens Boots plays in the global retail market.
Industry analysts, including Michael Cherny from Leerink Partners, expressed little surprise at the acquisition, noting that the deal’s size and complexity made a rival offer unlikely. Upon completion of the deal in the fourth quarter of this year, both the iconic Boots brand and Walgreens’ global operations will be under Sycamore’s control, signaling a significant shift in the pharmacy retail landscape both in the UK and internationally.
