- Walgreens (WBA) is going private in a $10 billion deal with Sycamore Partners, offering $11.45 per share and up to $3 more contingent on future primary-care unit sales, with a total potential value of $23.7 billion including debt.
- Facing a 70% stock drop over three years and competition from CVS Health Corp. (CVS), Amazon (AMZN), and others, Walgreens plans to close 1,200 unprofitable stores over the next three years while scaling back its health-care ambitions.
- The deal, set to close in Q4 2025, ends Walgreens’ public run since 1927, with Sycamore’s retail turnaround expertise aimed at reviving the company’s pharmacy-led model under CEO Tim Wentworth’s leadership.
Walgreens (WBA), the beleaguered drugstore giant with a workforce exceeding 310,000 and a sprawling network of 12,500 retail pharmacy locations worldwide, is poised to exit the public market in a landmark $10 billion deal with private equity firm Sycamore Partners. This transaction, announced on Thursday, marks a pivotal shift for a company that has faced unrelenting pressures, from pharmacy reimbursement challenges to intensified competition from CVS Health Corp. (CVS), grocery chains, big-box retailers, and Amazon (AMZN). With an equity value pegged at $10 billion, Sycamore will acquire Walgreens at $11.45 per share in cash – a modest 8% premium over Thursday’s $10.60 closing price – while shareholders may see an additional $3 per share contingent on future sales of its primary – care units, such as Village Medical, Summit Health, and CityMD. Including debt and these potential payouts, the total deal could reach $23.7 billion, a figure that underscores the scale of this transition for a company once valued at over $100 billion in 2015.
The move to go private signals a strategic retreat from the public eye, where Walgreens has endured a bruising decline—its stock plummeting 70% over the past three years and nearly 50% in the last year alone, despite a 13.6% uptick in 2025. This deal, slated to close in the fourth quarter of this year, arrives as Walgreens grapples with a retail pharmacy model that has faltered amid softer consumer spending and a rocky pivot into health care. CEO Tim Wentworth, who assumed leadership in 2023, framed the shift as a necessary evolution, noting in a release that Sycamore’s expertise in retail turnarounds offers the focus and flexibility Walgreens needs to execute its ambitious recovery plan. The company’s Chicago headquarters will remain intact, and it will proceed with its scheduled second-quarter earnings release on April 8, maintaining a semblance of continuity amid this upheaval.
Sycamore’s managing director, Stefan Kaluzny, emphasized the firm’s belief in Walgreens’ pharmacy-led framework and its critical role in health-care delivery—a vote of confidence in a business that has struggled to adapt. The company’s U.S. footprint, currently at 8,700 locations, is undergoing a drastic overhaul, with plans to shutter 1,200 stores over the next three years, including 500 in fiscal 2025, as a quarter of its outlets bleed profits. This follows a broader industry trend, with rival CVS also closing stores, though CVS has bolstered its resilience through diversification into insurance and pharmacy benefits—avenues Walgreens largely bypassed in favor of its now-struggling core operations. The decision to scale back its health-care ambitions, notably by reducing its stake in VillageMD, reflects a sobering recalibration for a company that once rode high on investor optimism about its expansion into primary care.
This isn’t the first time private equity has circled Walgreens; in 2019, KKR reportedly tabled a $70 billion buyout offer, a sum that dwarfed the current deal and highlighted how far the company’s fortunes have fallen. Back in 2015, Walgreens’ market cap soared past $100 billion, buoyed by its dominance as a retail pharmacy titan. By late 2024, however, that valuation had shriveled to below $8 billion, battered by post-Covid headwinds and a consumer landscape increasingly favoring convenience and e-commerce. Thursday’s announcement triggered a 6% surge in after-hours trading to $11.23 before a halt, a fleeting boost for a stock that has lost significant ground since its public debut in 1927. As Walgreens prepares to operate under Sycamore’s stewardship, the deal offers a lifeline—and a chance to retool away from the relentless scrutiny of Wall Street. Whether this privatization can restore its former luster remains an open question, but for now, it’s a decisive step toward survival in an unforgiving market.
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