The Walgreens logo is displayed at a Walgreens store on October 15, 2024 in San Rafael, California.
Justin Sullivan | Getty Images
Struggling drugstore chain Walgreens is going private.
The company on Thursday said it inked a deal with private equity firm Sycamore Partners that will take it off the public market for an equity value of around $10 billion.
Sycamore will pay $11.45 per share in cash for Walgreens. Shareholders could also receive up to $3 more per share in the future from sales of Walgreens’ primary-care businesses. Walgreens said the total value of the transaction would be up to $23.7 billion when including debt and possible payouts down the line.
Walgreens and Sycamore expect to close the take-private deal in the fourth quarter of this year.
The historic deal ends Walgreens’ tumultuous run as a public company, which began in 1927. Shares of the company are up more than 15% for 2025, but the stock is still down more than 48% for the last year and down 70% for the past three years.
Walgreens’s market value reached a peak of more than $100 billion in 2015 as investors gained confidence in its health-care business and expansion plans, making it one of the most prominent American retail companies.
But the company’s market cap shrank to under $8 billion in late 2024 due to competition from its main rival CVS, grocery chains, big-box retailers and Amazon, along with a slew of challenges. Walgreens has been squeezed by the transition out of the Covid pandemic, pharmacy reimbursement headwinds, softer consumer spending and a troubled push into health care.
Both Walgreens and CVS have pivoted from years of store expansions to shuttering hundreds of retail pharmacy locations across the U.S. to shore up profits. But unlike CVS, which has diversified its business model by offering insurance and pharmacy benefits, Walgreens largely doubled down on its now-flailing retail pharmacy business.
In October, Walgreens said it plans to close roughly 1,200 of its drugstores over the next three years, including 500 in fiscal 2025 alone. Walgreens has around 8,700 locations in the U.S., a quarter of which it says are unprofitable. The company has also scaled back its push into primary care by cutting its stake in provider VillageMD.
Walgreens tapped health-care industry veteran Tim Wentworth as its new CEO in late 2023 to help regain its footing.
The company has reportedly been seen as a potential private equity target in the past.
In 2019, private equity firm KKR made a roughly $70 billion buyout offer to Walgreens, the Financial Times and Bloomberg reported at the time.