The Walgreens Boots Alliance is on the verge of privately introducing a deal with private equity firm Sycamore Partners in a deal worth around $10 billion, according to the report.
The negotiations are in a sophisticated stage, with both sides aiming to seal the agreement on Thursday, but last-minute hurdles could still delay or derail the speech. The source told the Wall Street Journal.
The agreement includes Sycamore paying between $11.30 and $11.40 per share in cash, and may include contingent value rights that shareholders can earn if certain financial benchmarks are met.
As the acquisition progresses, Sycamore is likely to maintain Walgreens' core US retail pharmacy business while selling or adopting other segments of the company, sources told the Journal.
The discussion between Walgreens and Sycamore It first appeared in December In the ongoing struggle of the pharmacy giants.
Once a dominant American retailer, Walgreens has faced years of financial and operational challenges as stock prices have steadily declined over the past decade.
Last month, Walgreens announced it would close five locations in Southern California as part of its plans to permanently close 1,200 stores across the country.
The Chicago-based company, which owns 8,700 locations nationwide, says only one of the four stores is profitable.
Take Private Transactions are a major change for businesses that have been published since 1927 from 120 years ago.
At its peak in 2015, Walgreens' market capitalization was over $100 billion.
However, by the second half of 2024 its value had plummeted to under $8 billion, working to reduce profit margins and expand competition.
Unlike CVS Health, the main rival that expanded to insurance and pharmacy benefits, Walgreens doubled the traditional retail pharmacy model.
The entry into primary care rarely reversed its fate.
Under CEO Tim Wentworth, the company changed focus, reduced its health investments and aggressively reduced costs.
Earlier this year, Walgreens shares recovered temporarily after reporting more than expected adjusted earnings, but the financial burden of widespread store closures is clear.
In January, the Justice Department sued Walgreens, accusing them of fueling the opioid crisis by inappropriately dispensing prescription painkillers.
Shortly afterwards, the company suspended its quarterly dividends to maintain cash.
New York-based Sycamore Partners is known for its investments in retail and consumer brands, but previously acquired office supply retailer staples and smoothie chain Playa Bowls.
Walgreens' transactions, if completed, mark one of the largest transactions to date and rebuild the future of the pharmacy chain.
