Walgreens to Be Acquired by Private Equity Firm in Nearly $10B Deal
Walgreens Boots Alliance says it has agreed to be acquired by private equity firm Sycamore Partners as the struggling retailer looks to turn itself around after years of losing money. The pharmacy retail chain announced last week that Sycamore will pay $11.45 per share, giving the deal an equity value just under $10 billion.
Walgreens has been dealing with thin prescription reimbursement, rising costs, persistent theft and inflation-sensitive shoppers who are looking for bargains elsewhere. The retailer is in the early stages of a plan to close 1,200 of its roughly 8,500 U.S. locations.
Total Retail's Take: It is an uncertain time in the retail pharmacy sector with increased competition, particularly online, entering the market and leading players dealing with assorted challenges and transformations. In addition to Walgreens' news, Rite Aid has recently emerged from Chapter 11 bankruptcy protection as a private company, CVS has a new CEO amid layoffs and poor stock performance, and Kroger is dealing with the fallout from its failed merger with Albertsons. Therefore, there's an opportunity at hand for the organization that can seize it. That may well include optimizing a shrinking store footprint, connecting on a more personal level with customers to generate brand loyalty, and offering the value that cost-conscious consumers are looking for.
