Walgreens shareholders approve $10B acquisition by private equity firm
Walgreens confirmed in March it was being bought out by a private equity firm for roughly $10 billion. This week, shareholders for the struggling pharmacy chain approved the sale, which is now expected to close later this year.
The buyer, Sycamore Partners, is a New York City-based investment group that focuses on retail businesses. Its portfolio includes Staples, Belk and Hot Topic. Once the buyout of Walgreens is finalized, it will be taken off the market and become a private company under the firm’s umbrella.
A majority of Walgreens shareholders approved the terms of the sale, with 96% voting in favor at a special meeting. The company will be acquired for $11.45 per share, adding up to the $10 billion figure.
“We appreciate the consideration and overwhelming support from our shareholders in our value-maximizing transaction with Sycamore,” Tim Wentworth, CEO of Walgreens said. “With Sycamore’s partnership, we will be better positioned to accelerate our turnaround strategy, further enhance the customer, patient and team member experience, and become the first choice for pharmacy, retail and health services."
"We look forward to closing the transaction and entering this next chapter," he added.
As of July 11, Walgreens stock is trading at $11.52 per share, up 25% year-to-date on news of the buyout.
Walgreens has struggled to remain profitable in recent years. A year ago, the company announced plans to close a “significant” number of its remaining 8,700 stores, as 25% were experiencing unsustainably low sales.
As part of the deal, Walgreens will be offloading its stake in VillageMD, a chain of primary care clinics, as Sycamore Partners looks to focus on the core business of retail pharmacies.
Walgreens acquisition financed with debt
According to a filing with the U.S. Securities and Exchange Commission (SEC), the buyout appears to be made possible by Walgreens taking on more debt. A watchdog group, the Private Equity Stakeholder Project (PESP), has raised concerns that it could render the newly privatized Walgreens unsustainable, potentially resulting in even more store closures nationwide.
“We are very wary of Sycamore Partners purchasing Walgreens. The private equity business model could spell trouble for this large pharmacy chain. Many communities rely on Walgreens for access to necessary prescription drugs, and the company employs hundreds of thousands of people,” the group wrote in a statement.
PESP said that the private equity firm has a history of driving its companies into bankruptcy.
“Sycamore Partners, in particular, has demonstrated problems at the portfolio companies it has owned. Under Sycamore Partners’ ownership, multiple companies, including Belk and Nine West, have filed for bankruptcy. In addition, Sycamore Partners-owned companies have been fined for a number of health and safety, wage and hour, and environmental violations,” the group added.
The transaction could close after regulatory approval in Q3 2025.
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