Walgreens Goes Private: Sycamore Partners’ $27.3 Billion Takeover in 2025

A New York Private-Equity Firm Acquires Walgreens Boots Alliance in a Potential $27.3 Billion Deal

March 11, 2025 – In a groundbreaking move for the retail pharmacy industry, a New York-based private-equity firm, Sycamore Partners, has agreed to take Walgreens Boots Alliance Inc. private in a deal that could reach a staggering $27.3 billion. This acquisition marks the end of nearly a century of public trading for the U.S. pharmacy giant and signals a strategic shift as the company seeks to address mounting challenges in a rapidly evolving market.

Walgreens Boots Alliance Goes Private: Key Details of the $27.3 Billion Deal

Sycamore Partners, known for its expertise in retail and consumer investments, is spearheading this monumental transaction. The deal includes an equity valuation of approximately $10 billion, with Sycamore agreeing to pay $11.45 per share in cash for Walgreens Boots Alliance stock. Additionally, shareholders could receive up to $3 per share from the future monetization of Walgreens’ stake in VillageMD, a primary-care provider, bringing the total potential value to $27.3 billion when factoring in assumed debt and other payouts.

The transaction, expected to close in the fourth quarter of 2025, reflects Walgreens’ strategic decision to operate outside the pressures of Wall Street. CEO Tim Wentworth emphasized that going private will allow the company to focus on its ambitious turnaround plan, stating, “Meaningful value creation will take time, focus, and change that is better managed as a private company.”

Why Sycamore Partners Chose Walgreens Boots Alliance

Sycamore Partners, founded in 2011 and headquartered in New York, has a track record of acquiring distressed retailers like Staples, Belk, and Hot Topic. With approximately $10 billion in committed capital, the firm specializes in revitalizing consumer-facing businesses. Walgreens, with its portfolio of iconic brands like Boots UK and Duane Reade, represents an attractive opportunity for Sycamore to leverage its retail expertise.

Walgreens Boots Alliance has faced significant headwinds in recent years, including declining prescription reimbursements, rising operational costs, and competition from e-commerce giants like Amazon and Walmart. The company’s market capitalization, once exceeding $100 billion in 2015, had shrunk to under $10 billion by late 2024, making it a prime candidate for a private-equity takeover.

What This Means for Walgreens’ Future

The decision to go private offers Walgreens Boots Alliance greater flexibility to execute its turnaround strategy without the scrutiny of public shareholders. Under Wentworth’s leadership, the company has already embarked on a $1 billion cost-cutting program, including plans to close 1,200 stores by 2027—approximately one in seven of its current 8,500 U.S. locations. Going private could accelerate these efforts, allowing Sycamore to streamline operations, reduce debt, and potentially spin off valuable assets like Boots UK.

Analysts speculate that Sycamore may seek to divest certain segments of Walgreens’ business, such as its UK-based Boots chain or its stakes in VillageMD and Shields Health Solutions. Boots, in particular, has been viewed as a strong performer within the Walgreens portfolio, with reports suggesting it could be sold separately to maximize value.

The Bigger Picture: Private Equity in Healthcare and Retail

This $27.3 billion deal underscores the growing influence of private equity in the healthcare and retail sectors. Over the past decade, firms like Sycamore have invested heavily in struggling companies, often employing strategies like asset sales, cost reductions, and operational restructuring to unlock value. However, such moves have drawn scrutiny from regulators and lawmakers concerned about the impact on jobs, healthcare access, and long-term sustainability.

For Walgreens, the transition to private ownership could provide the breathing room needed to adapt to a shifting landscape where traditional pharmacies face pressure from online competitors and vertically integrated rivals like CVS Health. Unlike CVS, which diversified into insurance with its $70 billion acquisition of Aetna, Walgreens has struggled to pivot beyond its core retail pharmacy model.

Walgreens’ Storied History and Recent Struggles

Founded in 1901, Walgreens went public in 1927 and grew into one of America’s largest pharmacy chains. The 2014 merger with Alliance Boots, which valued Boots at £9 billion, solidified its global presence. However, the past decade has been tumultuous. The company’s stock has lost nearly 80% of its value over the last five years, dropping from a peak of over $100 billion to just $9.3 billion before the deal was announced.

Key challenges include:

• Declining Prescription Margins: Thin reimbursements from insurers and pharmacy benefit managers have squeezed profitability.

• Retail Competition: Shoppers increasingly turn to Amazon, Walmart, and dollar stores for household goods.

• Store Closures: High theft rates and an oversized store footprint have prompted widespread closures.

• Debt Burden: Walgreens’ debt and lease obligations have ballooned to nearly $30 billion.

Despite these hurdles, the company retains a strong foundation, employing 312,000 people across 12,000 stores in eight countries as of 2025.

What’s Next for Walgreens and Sycamore Partners?

The deal includes a 35-day “go-shop” period, during which Walgreens can solicit competing bids. However, analysts like Michael Cherny from Leerink Partners doubt a higher offer will emerge, given the complexity of the transaction and Walgreens’ operational challenges.

If approved by shareholders, Sycamore Partners will assume control later this year, with Executive Chairman Stefano Pessina—Walgreens’ largest single shareholder—reinvesting his proceeds to maintain a significant stake. This continuity suggests confidence in the company’s long-term potential under private ownership.