Business reporter Annabelle Liang reports that Walgreens Boots Alliance, the US owner of Boots, a high street chemist, is set to go private in a $10 billion deal, marking the end of nearly a century of trading on public markets. The company has been grappling with increasing debt as customers shift towards online shopping and more budget-friendly products.
In a recent shakeup, around 300 Boots stores in the UK were closed, leaving 1,900 stores still in operation. The total value of the transaction, including debt and potential future payouts, could reach $23.7 billion. Under the agreement, US private equity firm Sycamore Partners will acquire Walgreens Boots Alliance for $11.45 per share, a figure higher than the current market value of its shares.
Following the announcement, shares of Walgreens rose by almost 6% in after-hours trading in New York. The deal is projected to be finalized by the end of the year. Tim Wentworth, the CEO of Walgreens, acknowledged the challenges within the pharmacy industry and competitive retail landscape, emphasizing the need for significant changes to drive value creation.
Walgreens initially acquired a 45% stake in Boots back in 2012, eventually purchasing the remaining shares in a deal worth around £9 billion two years later. The company, based in Illinois, also consists of its US retail business, Shields Health Solutions specialty pharmacy group, and healthcare provider VillageMD. Despite facing hurdles in recent times, including customers flocking to lower-priced alternatives, Walgreens has continued to adapt its strategy to navigate the changing market dynamics
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