March 7 (UPI) -- Walgreens Boots Alliance Friday said the drug store chain is going private, acquired by private equity company Sycamore Partners in a $23.7 billion deal described as a "definitive agreement."
The deal is expected to close in the fourth quarter of 2025, subject to regulatory and WBA shareholder approval, Walgreens said in a statement.
"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. Sycamore will provide us with the expertise and experience of a partner with a strong track record of successful retail turnarounds," Walgreens Boots Alliance CEO Tim Wentworth said.
The Walgreens announcement made no mention of how many of Walgreens' 311,000 workers will remain employed when the sale to Sycamore Partners is completed.
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"Sycamore has deep respect for WBA's talented and dedicated team members, and we are committed to stewarding the Company's iconic brands. This transaction reflects our confidence in WBA's pharmacy-led model and essential role in driving better outcomes for patients, customers and communities," Sycamore Partners Managing Director Stefan Kaluzny said.
In January the Justice Department sued Walgreens over opioid drug prescriptions, alleging that millions of unlawful prescriptions were dispensed by the drugstore chain over many years.
The suit said that beginning in 2012 Walgreens wrongly filled millions of prescriptions for addictive opioids and then claimed government healthcare reimbursement for many of them.
In September 2024 Walgreens agreed to pay a $106.8 million fine for violating the False Claims Act. The fine was for billing health care programs for prescriptions people did not pick up.
In October 2024 Walgreens said it would close roughly 1,200 stores through 2027. The company said then that of the approximately 8,700 Walgreens stores, over a quarter of them were not profitable.
Annual revenue for Walgreens in 2024 was estimated by Wall Street analysts to be roughly $147.3 billion.
The deal for Walgreens to go private announced Friday includes a "go-shop period" of 35 days where Walgreens will actively solicit alternative proposals from other potential buyers.
Walgreens said, 17% of WBA's outstanding common stock held by Executive Chairman Stefano Pessina's holding company, will vote the shares in favor of the deal with Sycamore.
WBA shareholders will get $11.45 a share in cash when the deal with Sycamore closes.
Walgreens said total cash consideration for shareholders "represents a premium of up to 63%, to the WBA closing share price of $8.85 on December 9, 2024."
