By Daily Mail (U.S.) | Created at 2025-03-04 20:36:43 | Updated at 2025-03-04 23:13:20
2 hours ago
The future of Walgreens is uncertain as the beleaguered company nears a major deal.
The struggling pharmacy giant is reportedly nearing a $10 billion deal to sell itself to private equity firm Sycamore Partners, according to reports from The Wall Street Journal.
The deal would take the company private and could lead to the dismantling of unprofitable sections of the brand.
Sources close to the negotiations told the Journal that an agreement could be announced as early as March 6.
Sycamore is expected to pay between $11.30 and $11.40 per share for Walgreens Boots Alliance, a slight premium over Monday's closing price of $10.26.
Walgreens shares jumped on March 4 following the report, trading at around $11. Shares of the company, however, are down more than 51 percent over the past year.
If the deal goes through, Sycamore is expected to continue operating some Walgreens retail locations while selling or spinning off other business segments.
The company has been shutting scores of locations, and CEO Tim Wentworth said in January Walgreens expected to significantly increase the pace of closures and had targeted the next 450 stores, the Journal reported.
Walgreens is reportedly in talks to sell the brand - it could lead to major spin-offs
Beyond its flagship stores, Walgreens also owns Boots, VillageMD, Duane Reade, and No7 Beauty.
The pharmacy chain did not immediately respond to requests for comment.
Walgreens has been a fixture of American retail since its founding in 1901.
In 2014, it merged with Boots, a U.K.-based pharmacy chain, forming Walgreens Boots Alliance, which now operates around 12,500 locations worldwide.
But the companies have encountered serious headwinds as the pharmacy industry undergoes massive disruptions.
More customers are turning to online delivery for prescriptions, while Walgreens -where 25 percent of sales come from household essentials and drugstore cosmetics - has struggled to compete on price and convenience.
In a bid to turn the company around, it has announced plans to shutter stores from its bloated brick-and-mortar portfolio.
Around 1,200 shops are on the chopping block in the next three years.
'Walgreens has been in a tailspin for a long period of time,' retail expert Neil Saunders, of Global Data, previously explained to the Daily Mail.
'Profitability and sales are under pressure, especially on the retail side of the business.'
Experts say Walgreens' hasn't invested enough in its retail operations
The company also operates a handful of other chains, like New York City-based Duane Reade
The retailer has been struck hard by pricing issues, with customers turning to bargain shops
Other competitors have also run into some major trouble.
CVS has announced plans to close around 900 stores by 2026. Rite Aid filed for bankruptcy in 2023 after the company settled multiple million-dollar lawsuits alleging it over-prescribed addictive opioid drugs.
Similarly, Walgreens received a lawsuit from the U.S. Justice Department in mid-January, alleging the company also contributed to the opioid crisis.
Meanwhile, Sycamore has a long history of buying shrinking retailers and breaking them up.
The New York-based private equity firm bought Staples in 2017 before chopping up the retailer.
It also purchased smoothie chain Playa Bowl in late 2024.
