Walgreens Nears $10 Billion Deal to Go Private with Sycamore Partners

CHICAGO, IL — Walgreens Boots Alliance is reportedly on the brink of finalizing a deal with Sycamore Partners to take the struggling drugstore chain private in a transaction valued at around $10 billion. Negotiations are in advanced stages, with both parties aiming to close the deal as early as Thursday, March 6, 2025. However, a last-minute hurdle could still delay or derail the agreement.

According to The Wall Street Journal, Sycamore is expected to offer cash between $11.30 and $11.40 per share, potentially including contingent value rights that would allow shareholders to benefit if specific financial benchmarks are achieved.

If the acquisition proceeds, Sycamore would likely retain Walgreens’ core U.S. retail pharmacy business while pursuing options to sell or publicize other segments of the company. This potential shift comes amid ongoing struggles for Walgreens, which has faced significant financial and operational challenges, seeing its stock price decline steadily over the past decade.

Once a dominant player in American retail, Walgreens has been grappling with intense competition, especially from online retailers like Amazon, along with diminishing profit margins and challenging prescription reimbursement rates. In a bid to streamline operations, Walgreens announced last month the closure of five locations in Southern California as part of a larger plan to shut down 1,200 underperforming stores nationwide.

At its peak in 2015, Walgreens boasted a market capitalization exceeding $100 billion. However, by late 2024, its market value plummeted to below $8 billion. Unlike its chief competitor, CVS Health, which diversified into insurance and pharmacy benefits, Walgreens has stuck to its traditional retail model. Attempts to branch into primary care have failed to reverse its fortunes.

Under the leadership of CEO Tim Wentworth, Walgreens has sought to cut costs aggressively and refocus its business. Earlier this year, the company experienced a brief rally in its stock prices after reporting better-than-expected earnings. However, the financial strain from store closures remains evident.

In January, Walgreens faced legal challenges when the Justice Department accused it of contributing to the opioid crisis by improperly dispensing prescription painkillers. Shortly thereafter, the company suspended its quarterly dividend to conserve cash.

Sycamore Partners, a New York-based private equity firm known for its investments in retail and consumer brands, has previously acquired companies like Staples and Playa Bowls. If the Walgreens deal is completed, it would be one of the firm’s largest transactions, significantly altering the future trajectory of the pharmacy chain.