Walgreens Boots Alliance, owner of the Boots pharmacy chain since 2014, is set to be acquired by US private equity firm Sycamore Partners for $10 billion (£7.7 billion).
Sycamore’s offer of $11.45 per share, which represents an 8 per cent premium on Walgreens’ most recent closing price, stands in stark contrast to the $85 per share peak reached in 2015, when the company was valued at over $90 billion.
Over the past year, Walgreens’ share price has almost halved amid stiff competition from online retailers and pressures on health insurance payouts. Despite employing some 311,000 people worldwide, the company has struggled to maintain profitability, prompting its leadership to consider several strategic moves — including carving out Boots — whenever its market cap slumped.
Sycamore Partners, based in New York, owns US-based stationery chain Staples (acquired for $7 billion in 2017) and healthy-eating restaurant chain Playa Bowls. It has previously owned Kurt Geiger and attempted to purchase Ted Baker in 2022. The Walgreens transaction includes a 35-day “go-shop” window, during which the US pharmacy giant can invite and assess competing bids.
Walgreens Boots manages about 12,500 pharmacies worldwide, including 1,900 Boots stores in the UK. The chain’s roots date back 174 years, having been credited with popularising pharmacy-led retail across Britain. Although it benefited from an explosion of demand in the 1990s and early 2000s, Boots has faced fresh competition in recent years, coupled with periodic financial burdens stemming from its parent company’s shifting fortunes.
Under Sycamore Partners’ ownership, Walgreens is set to go private, with chief executive Tim Wentworth arguing that the group’s “ambitious turnaround strategy” will be more effectively managed away from the public glare. Stefan Kaluzny, Sycamore’s managing director, says the firm remains confident in the “pharmacy-led model” and “essential role” of the Walgreens Boots network.
Analysts such as Michael Cherny at Leerink Partners expressed little surprise at the announcement, noting that the scale and complexity of the deal made a rival offer unlikely. By the time the deal closes in the fourth quarter of this year, both the iconic Boots brand and Walgreens’ broader global operations will be under Sycamore’s ownership, signalling a significant shake-up in both British and international pharmacy retail.
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Boots snapped up by US private equity giant Sycamore in $10bn takeover