Struggling pharmacy giant Walgreens is set to transition to private ownership through an agreement with private equity firm Sycamore Partners valued at approximately $10 billion. This pivotal move marks a significant ending to Walgreens’ turbulent journey as a public entity, beginning in 1927.
Details of the Acquisition
Walgreens announced that Sycamore will acquire the company at a price of $11.45 per share in cash, reflecting an approximate 8% premium over the stock’s closing price on Thursday. Additionally, shareholders may earn up to an extra $3 per share in the future stemming from sales of Walgreens’ primary-care sectors, which include Village Medical, Summit Health, and CityMD.
The total financial impact of the deal could reach as high as $23.7 billion, taking into account both debt and potential future payouts. Walgreens and Sycamore anticipate finalizing the process in the fourth quarter of this year. Following the announcement, Walgreens shares surged over 5% in after-hours trading before trading was halted.
End of an Era
The acquisition signifies a culmination of Walgreens’ notable period on the public market. Despite a respectable rise at the beginning of 2025, where shares increased by more than 15%, the company has witnessed an alarming decline of over 48% over the past year and a staggering 70% over the last three years.
In a statement, Walgreens CEO Tim Donovan emphasized that while progress is being made on their turnaround strategy, substantial value creation requires focused management available in a private setting. “Sycamore’s proven track record in retail turnarounds gives us the needed expertise,” he added.
Stefan Kaluzny, managing director at Sycamore, expressed confidence in Walgreens’ essential role in healthcare, arguing that the company’s pharmacy-led approach is vital for improving patient and community health outcomes.
Future Plans and Challenges
Despite shifting to private ownership, Walgreens will retain its headquarters in Chicago and continue its operations, which employ more than 310,000 individuals across the globe and maintain around 12,500 retail pharmacy locations throughout the U.S., Europe, and Latin America. The company is still planning to reveal its second-quarter earnings report on April 8.
Historically, Walgreens was valued at over $100 billion in 2015, buoyed by optimism around its healthcare ventures and growth initiatives. However, due to increasing competition from CVS, grocery chains, and e-commerce giants like Amazon, as well as tough market conditions following the pandemic, Walgreens’ market valuation has plummeted below $8 billion.
The firm has announced plans to close approximately 1,200 stores within three years, focusing on unprofitable locations. Currently, Walgreens operates around 8,700 U.S. locations, with a quarter deemed unprofitable, and has deferred its expansion into primary care, trimming its investment in VillageMD.
Tim Donovan was brought on board as the new CEO in late 2023, tasked with revitalizing the organization in an increasingly competitive landscape, where Walgreens had previously been speculated as a potential target for private equity investment.
Conclusion
This transformative deal signals not only a strategic redirection for Walgreens but also raises questions about the future landscape of retail pharmacy as the industry grapples with changing consumer behavior and competitive forces.
