Walgreens on Verge of $10B Deal with Sycamore Partners to Go Private

The drugstore chain is reportedly nearing a sale to the private equity firm that could lead to a breakup of its businesses.

After several months of on-again, off-again rumors, Walgreens' fate in a potential sale may finally be reaching a resolution.

The retail pharmacy giant and private equity firm Sycamore Partners are closing in on a $10 billion deal to take the company private, according to The Wall Street Journal, which cited people familiar with the matter.

The report stated that the two sides have been discussing Sycamore paying between $11.30 a share to $11.40 a share in cash to complete the transaction.

Discussions of a deal were first reported in December after Walgreens shares fell and its market value plummeted from $100 billion in 2015 to under $8 billion at the end of 2024.

If Sycamore takes over, it could result in the company's businesses being split up three ways, with U.S.-based Walgreens, U.K-based chemist and retailer Boots, and speciality pharmacy Sheild Health Solutions turned into independent units, according to The Financial Times.

Sycamore is expected to retain Walgreens' U.S. retail business in the event a deal is completed, WSJ said. Though the firm doesn't have experience with healthcare investments, it is well-versed in the retail space and could make the most of Walgreens' brick and mortar footprint.

However, Walgreens has been working to shut down unprofitable store locations to reduce costs, including closing 70 stores in the first quarter of the fiscal year and planning for another 450 closures this year.

For the first quarter, the company beat Wall Street expectations and saw its sales increase by 7.5% year over year, but still reported a net loss of $265 million, compared to $67 million in the same period for the previous year.

Days after posting its earnings, Walgreens suspended its quarterly dividend for the first time in 92 years to reduce debt and conserve cash.