MW Walgreens' breakup looms as $10 billion sale to go private is reportedly in the works

By Mike Murphy

Acquisition by Sycamore Partners could be announced this week, WSJ reports

Drugstore chain Walgreens Boots Alliance Inc. is closing in on a roughly $10 billion deal to sell itself to Sycamore Partners, a private-equity firm, which would then take Walgreens private and likely break it up, according to reports late Monday.

The Wall Street Journal first reported the potential deal, which it said could be announced as soon as Thursday. Bloomberg News later matched that report.

Sycamore declined to comment Monday night. Walgreens did not immediately respond to a request for comment.

According to the Journal, Sycamore would acquire Walgreens $(WBA)$ for $11.30 to $11.40 a share in cash, or about $10 billion. That compares to Monday's closing price of $10.26 for the stock.

After falling 3.9% during regular trading Monday, Walgreens shares rallied 5.2% in after-hours trading following the Journal report.

The reports said Sycamore would take Walgreens off the public market, leading to the company's likely breakup. Sycamore would keep the core U.S. retail business, the Journal reported, while looking to sell or take public other parts of the company, which includes British pharmacy chain Boots, U.S. healthcare provider Village MD, U.S. drugstore chain Duane Reade and No7 Beauty Co.

The Journal first reported talks between Walgreens and Sycamore in December, boosting the stock, which is up about 10% year to date.

Last week, Deutsche Bank analyst George Hill warned that Walgreens' stock had run up too high in acquisition anticipation, giving a $9 price target. "The deal strikes us as incredibly complicated and unlikely to be consummated at a premium to the current share price," Hill said in a note.

Despite the recent rally, Walgreens shares have fallen 50% over the past year. After peaking in July 2015 with a market value of more than $100 billion, the stock has steadily slumped, giving the company a current market cap of about $9.2 billion.

Walgreens was founded by Charles Walgreen in 1901 and has been publicly traded since 1927. The company merged with U.K.-based Boots Alliance in 2014. Walgreens Boots Alliance currently has about 12,500 locations around the world, and employs around 312,000 people, according to the company.

-Mike Murphy

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March 03, 2025 21:14 ET (02:14 GMT)

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