Boots Owner Walgreens Nears Ten Billion Dollar Takeover By Sycamore Partners

The owner of Boots, one of the UK’s most recognisable high street chemists, is on the verge of being taken private in a deal valued at $10 billion. Walgreens Boots Alliance, the US-listed parent company of Boots, is said to be in advanced talks with the New York-based private equity firm Sycamore Partners.

According to reports, the two parties are aiming to finalise the deal imminently, marking a significant development in the ownership of the British retail chain. Walgreens operates over 8,700 stores in the United States, alongside 2,000 Boots pharmacies in the United Kingdom, making the acquisition a high-profile transaction. However, there is speculation that the deal could mean either a sale or a public offering for Boots in the future.

Walgreens, which previously abandoned plans for a London stock market float of Boots, has struggled in recent years with declining values. While Boots remains one of Walgreens’ best-performing assets, the wider group has faced challenges including weak retail performance in the US and strained pharmacy margins due to low reimbursement rates for prescriptions. Walgreens’ market value has plummeted by more than 80 per cent in recent years, although there has been a slight recovery since January amid takeover rumours.

Tim Wentworth, Walgreens’ chief executive since 2023, has implemented a series of cost-saving measures to help stabilise the company. These include a $1 billion cost-cutting plan, closing 1,200 stores over three years, and removing several mid-level executives. Recent financial results showed progress, with a 7.5 per cent increase in first-quarter sales to $39.5 billion compared to the previous year. However, this progress has been marred by restructuring costs, resulting in a net loss of $265 million for the quarter.

As the discussions with Sycamore Partners continue, observers are divided about the potential impact of the private equity deal on Boots and its 2,000 outlets across the UK. Some anticipate that the brand could be retained and strengthened, while others fear it may be broken up or sold off.

This impending deal not only represents a major financial win for Walgreens’ chairman Stefano Pessina, the group’s largest shareholder, but also raises questions about the long-term strategy for one of Britain’s most iconic retailers.