Walgreens Checks Out: Sycamore Partners Buys It for $10B

Walgreens has entered into an agreement to be purchased by Sycamore Partners. The private equity firm is set to pay $11.45 per share, an equity value of approximately $10 billion. Walgreens shareholders may also receive an additional $3 in cash from the future monetization of the company's debt and equity stakes in primary care provider VillageMD. 

Speculation about the Sycamore sale, which could end Walgreens’ nearly 100-year run as a public company, has been swirling since late last year. The company has faced mounting challenges, including a net loss of $8.6 billion in 2024 and the closure of numerous VillageMD clinics. Amid these struggles, Walgreens had already started shutting down thousands of underperforming stores after CEO Tim Wentworth warned that its 8,700 U.S. locations were falling short financially.

The Downfall

Walgreens’ share price has plummeted over the past decade as it struggled with declining prescription reimbursements and growing retail competition. As drug margins shrank, consumers increasingly turned to lower-cost alternatives like Amazon and Walmart for prescriptions and everyday essentials. While competitors diversified into insurance and prescription management, Walgreens invested billions in acquiring pharmacy chains like European giant Alliance Boots—despite the industry’s shift away from in-store shopping. Meanwhile, its top rival, CVS, expanded beyond retail, notably acquiring U.S. health insurer Aetna for nearly $70 billion in 2018. Walgreens reportedly considered purchasing Humana but ultimately abandoned the idea.

What’s Next? 

Sycamore, a private equity firm specializing in retail and consumer investments, has a history of acquiring struggling retailers for profit, including brands like Staples, Talbots, and Nine West. Its strategy has often involved selling off the most valuable assets, cutting costs through store closures and other measures, and using the savings to distribute dividends—rather than reinvesting in growth.

The sale raises concerns that profitable Walgreens stores in wealthier areas may be sold while locations in poorer, underserved communities are shut down, impacting public health. Unlike mail-order pharmacies, retail locations provide immediate access to essential medications and vaccines. Additionally, in medically underserved areas, pharmacies often serve as one of the few opportunities for patients to consult a healthcare professional about managing chronic conditions like hypertension and diabetes.

However, some believe the Walgreens sale could bring long-term benefits. The downfall of such a major pharmacy retailer is unlikely to go unnoticed at the federal level, potentially serving as an inflection point and accelerating reforms in pharmacy pricing strategies where, without meaningful change, both retail pharmacies and the communities they serve will continue to face significant risks. 

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