Walgreens Boots Alliance to Be Acquired by Sycamore Partners in a $23.7 Billion Deal
Walgreens Boots Alliance has announced that it has entered into a definitive agreement to be acquired by an entity affiliated with Sycamore Partners (“Sycamore”), a private equity firm that specializes in retail, consumer, and distribution-related investments. The total value of the transaction is estimated at up to $23.7 billion. Under the terms of the agreement, WBA shareholders will receive $11.45 per share in cash at closing, along with a non-transferable right (the “Divested Asset Proceed Right” or “DAP Right”) to receive up to an additional $3.00 per share from the future monetization of WBA’s interests in VillageMD, which includes Village Medical, Summit Health, and CityMD businesses.
Walgreens Boots This acquisition offers a significant premium to WBA shareholders, with the Walgreens Boots Cash Consideration alone representing a 29% premium over the WBA closing share price of $8.85 on December 9, 2024. The total potential consideration, including DAP Rights, represents an overall premium of up to 63%. The agreement aligns with WBA’s strategic vision to enhance its position as a leader in pharmacy, retail, and health services, leveraging Sycamore’s expertise in consumer-focused retail businesses.
Strategic Rationale and Future Direction
Walgreens Boots By joining forces with Sycamore, WBA is set to strengthen its operational capabilities and financial standing, allowing it to navigate the evolving pharmacy and healthcare landscape more effectively. WBA will continue to operate under its well-recognized Walgreens and Boots brands while maintaining its headquarters in the Chicago area. The company’s mission remains focused on delivering accessible, high-quality healthcare and retail services to consumers.
Tim Wentworth, CEO of WBA, emphasized the significance of the acquisition:
“Walgreens Boots Alliance has long played a pivotal role in the retail healthcare ecosystem. As we continue our journey to transform healthcare delivery to be more efficient, affordable, and convenient, we recognize the challenges of an increasingly competitive landscape. While we have made progress in our turnaround strategy, creating meaningful value requires time, focus, and flexibility—something better facilitated as a private company. Partnering with Sycamore enables us to accelerate our transformation while delivering immediate value to shareholders.”
Walgreens Boots Wentworth also expressed gratitude for WBA’s 311,000 global employees, recognizing their dedication to serving customers and patients worldwide.
Sycamore’s Managing Director, Stefan Kaluzny, reinforced the firm’s confidence in WBA’s potential:
“For nearly 125 years, Walgreens, and for 175 years, Boots, have been trusted brands serving millions of customers. We highly respect WBA’s talented workforce and remain committed to upholding and enhancing its legacy. This acquisition reflects our belief in the company’s long-term strength and its critical role in driving better health outcomes for communities.”
Transaction Details, Approvals, and Timeline
The transaction has been unanimously approved by WBA’s Board of Directors, with Stefano Pessina and John Lederer recusing themselves from deliberations and voting. The acquisition is expected to close in the fourth quarter of 2025, subject to customary closing conditions, including regulatory approvals and shareholder votes. The agreement stipulates that the majority of votes cast by WBA shareholders unaffiliated with Mr. Pessina or Sycamore must approve the deal.
Notably, the transaction is not contingent on financing conditions, as Sycamore has already secured fully committed financing. Once completed, WBA will transition into a privately held company and will no longer be listed on the Nasdaq Stock Market.
Go-Shop Period
Walgreens Boots To ensure maximum value for shareholders, the agreement includes a 35-day “go-shop” period, during which WBA, with the assistance of financial advisor Centerview Partners, can actively seek and evaluate alternative proposals. While this process provides an opportunity for superior offers to emerge, there is no guarantee that a better bid will materialize.
Voting and Reinvestment Agreements
As part of the acquisition agreement, Sycamore and WBA have entered into voting and reinvestment arrangements with WBA’s Executive Chairman, Stefano Pessina, and his holding company. Together, they hold approximately 17% of WBA’s outstanding common stock. Under these agreements, Pessina and his holding company will vote in favor of the acquisition and reinvest all their Cash Consideration, plus additional funds, into the acquiring entity.
Additionally, Pessina and his holding company will receive DAP Rights equivalent to their shareholding percentage, ensuring continued financial interest in the future success of the VillageMD businesses.
Monetization of VillageMD Assets
WBA is actively exploring options to maximize the value of its significant debt and equity interests in VillageMD and related businesses. A newly formed Divested Assets Committee—comprising representatives from the pre-closing WBA Board, Mr. Pessina, and Sycamore—will oversee this process post-acquisition. The committee will evaluate various strategic pathways, including operational enhancements and balance sheet improvements, to optimize the eventual monetization of these assets.
WBA, as the sole lender to VillageMD businesses, expects to receive 100% of the net proceeds from any sale, up to the amount of outstanding debt (which stood at $3.4 billion as of February 28, 2025, accruing interest at 19% annually). Under the DAP Rights structure, 70% of net proceeds from these sales will be distributed to shareholders, with a maximum payout of $3.00 per DAP Right, totaling approximately $2.7 billion across all shareholders.
However, while the committee is committed to maximizing value, there is no assurance regarding the timing, terms, or potential sale outcomes of the Divested Assets.
Financial Reporting and Earnings Announcement
WBA is scheduled to release its fiscal 2025 second-quarter earnings on April 8, 2025, alongside the filing of its Quarterly Report on Form 10-Q. Investors and stakeholders can access the earnings report and further details on WBA’s investor relations website.
Advisors
A team Walgreens Boots of leading financial and legal advisors is guiding WBA and Sycamore through the transaction:
- For WBA: Centerview Partners serves as the financial advisor, while Kirkland & Ellis LLP provides legal counsel. Ropes & Gray LLP is acting as healthcare regulatory counsel. Morgan Stanley & Co. LLC also contributed a fairness opinion to the WBA Board.
- For Sycamore Partners: UBS Investment Bank leads the financial advisory team, with Goldman Sachs, J.P. Morgan, Citi, and Wells Fargo providing additional financial advisory services. Davis, Polk & Wardwell LLP is serving as legal counsel, and Bass Berry & Sims PLC is acting as healthcare regulatory counsel.
The acquisition of Walgreens Boots Alliance by Sycamore Partners marks a significant milestone in the evolution of one of the world’s leading pharmacy and retail enterprises. The deal not only provides immediate value to shareholders but also sets the stage for WBA’s transformation into a more agile, privately held company positioned for long-term success. By leveraging Sycamore’s expertise, WBA aims to continue its legacy of serving customers with best-in-class pharmacy, retail, and health services.
As the transaction progresses toward completion, stakeholders will closely monitor regulatory approvals, shareholder votes, and developments regarding the monetization of VillageMD assets. The future of WBA under Sycamore’s ownership holds promise for innovation and enhanced consumer-focused healthcare solutions.
