US owner of UK pharmacy chain Boots to be taken private in $10bn deal

The Guardian

07-03-2025

The US owner of the high street pharmacy chain Boots is to be taken private in a $10bn (£7.8bn) deal that will bring an end to almost a century of trading on public markets for Walgreens Boots Alliance.
The company, which operates about 1,900 Boots stores in the UK, has been sold to the US private equity firm Sycamore Partners after struggling in the internet era as customers have turned to online shopping for cheaper products.
Walgreens' market capitalisation has collapsed by 90% since 2015 and is now valued at $9.3bn. It has debt and lease obligations of $30bn.
Sycamore Partners has struck an $11.45-a-share deal for the company, giving it an equity value of around $10bn.
However, investors could receive an extra $3 a share based on the sale of Walgreens' primary care business, VillageMD, valuing the business, including debt, at $23.7bn.
After the emergence of the deal talks in December, it was reported that if a sale was completed, Sycamore was likely to retain the US retail business and sell or spin off the remainder of the business, which includes the UK pharmacy chain Boots.
Walgreens first took a stake in Boots in 2012 and completed a buyout two years later. In 2020, during the coronavirus pandemic, Boots said it was cutting 4,000 jobs, about 7% of its workforce, and shut almost 50 of its opticians branches.
Two years ago the chain announced the closure of 300 shops, which it completed at the end of last year, as it 'evolved' its store estate.
In 2022, Walgreens put Boots up for sale but later dropped the plans as potential buyers struggled to raise funds.
The deal will bring an end to Walgreens' 97-year run as a listed company, although the second-largest pharmacy chain in the US still has 35 days to seek or entertain rival bids.
As part of the deal with Sycamore, the Italian billionaire Stefano Pessina, Walgreens' executive chair and the largest shareholder, will keep a minority shareholding in the business.
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Pessina forged the transatlantic pharmacy company by merging the US-based Walgreens with Alliance Boots of Europe in 2014, having paid £4.3bn to take a 45% stake in the business in 2012.
Walgreens' market value peaked at $100bn soon after the completion of the merger but it has declined over the last decade as e-commerce has hit its high street trading operation.
Tim Wentworth, the chief executive of Walgreens, said the company was navigating the 'challenges of a rapidly evolving pharmacy industry and an increasingly complex and competitive retail landscape'.
He said: 'While we are making progress against our ambitious turnaround strategy, meaningful value creation will take time. Focus and change that is better managed as a private company.'