• Walgreens Boots Alliance agrees to a $10 billion acquisition by Sycamore Partners.
• The deal values Walgreens at $11.45 per share, including a potential additional payout for shareholders.
• Walgreens has faced significant losses and plans to close 1,200 U.S. stores as part of its restructuring strategy.

Walgreens Boots Alliance has officially announced its decision to be acquired by Sycamore Partners, a private equity firm, for just under $10 billion, marking a pivotal shift in the company’s operational approach as it aims to navigate financial difficulties New York Times. The agreement establishes a purchase price of $11.45 per share, which includes the potential for an added $3 per share for shareholders under specific conditions.

This move is expected to offer Walgreens the needed flexibility to restructure its business model without the pressures linked to public trading and stock market scrutiny. CEO Tim Wentworth asserted that the company is focusing on improving healthcare delivery amidst challenges in the evolving pharmacy sector. The shift to private ownership comes as Walgreens deals with a tumultuous financial period, characterized by declining prescription reimbursements, mounting debt, and a drop in market value, down approximately 90% since its peak a decade ago Reuters.

Over the past year, Walgreens has also initiated significant operational changes, including plans to close about 1,200 of its roughly 8,500 U.S. locations, as it seeks to cut costs and improve cash flow. These closures follow a previous loss of over a thousand stores after acquiring some Rite Aid outlets in 2018. Furthermore, the company is reviewing its recently expanded U.S. health operations and may divest its VillageMD clinic business HuffPost.

In addition, Walgreens has suspended its quarterly dividend—a significant shift for the company, which had maintained this practice for over 90 years—as part of efforts to conserve cash. Overall, the deal with Sycamore, valued at around $24 billion including debt, highlights a substantial evolution in Walgreens’ strategy amidst a challenging retail climate CBS News, BBC.