Walgreens Boot Alliance agreed to be acquired by private equity firm Sycamore Partners. The parties entered in a merger agreement in March 2025 that values Walgreens at approximately $23.7 billion. The transaction will be one the major leveraged buyouts in recent years. The merger is expected to close at the end of 2025 and will result in Walgreens becoming a private company.

In recent years, Walgreens has struggled to keep up with changes in the healthcare retail sector. E-commerce giants such as Amazon have taken market share away from Walgreens. Walgreens hopes this leveraged buyout will provide a boost to its pharmacy, healthcare, and retail operations.

Walgreen’s CEO Tim Wentworth sees significant benefits to the transaction with Sycamore. “Going private is going to let us be more focused, more nimble, more long-term in our decision-making, in the context of the challenges that we continue to face. That gives us both the time and the ability to focus in a way to transform Walgreens.”

Sycamore Partners is a private equity firm based in New York with around $10 billion in aggregate committed capital. The firm’s investments are focused on the retail and consumer sectors.

Sycamore agreed to purchase Walgreens at $11.45 per share in cash. Once the merger closes, shareholders of Walgreens will receive $11.45 per share in cash as well as the right up to $3.00 per share in cash for the future divestment of Walgreen’s interest in VillageMD. VillageMD is a value-based primary care chain that owns CityMD, Village Medical, and Summit Health.

Walgreens currently trades on Nasdaq under the ticker symbol “WBA.” The company has approximately 311,000 employees and is headquartered in Chicago. In 2014, Walgreens and Alliance Boots merged in an attempt to create a retail pharmacy powerhouse.

The merger agreement provides for an initial go-shop period of 35 days. This provides Walgreen with an opportunity to actively solicit alternative offers and to negotiate with other parties. Go-shop periods typically range from 30-45 days. Walgreens is not obligated to provide updates during the go-shop period about whether it has received superior offers from alternative bidders. The board of directors of Walgreens is only obligated to disclose if the company made a decision about an alternative offer.

The merger agreement contains customary termination provisions. The buyer termination fee is $560 million. If Walgreen decides to terminate the merger agreement to enter into a superior proposal during the go-shop period, it would have to pay a termination fee of $158 million. Outside of such circumstances, Walgreen would have to pay a termination fee of $316 million for terminating the merger agreement.

Sycamore Partners received equity and debt financing commitments from a number of banks in connection with the acquisition. Among other things, the commitment letters provide for asset-based revolving loans, term loans, and preferred equity financing.

In connection with entering into the merger agreement, Sycamore Partners and Walgreens also entered into voting and reinvestment agreements.  The agreements require Stefano Pessina, the executive chairman of Walgreen’s, to vote all his shares in favor of the transaction. Mr. Pessina owns approximately 17% of Walgreen’s outstanding shares of common stock.