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[Alpha Biz= Kim Jisun] Walgreens Boots Alliance, the largest pharmacy chain in the United States, announced on Friday (local time) that it would sell its stake to a private equity firm and transition to a privately held company.


According to the announcement, Walgreens has signed an agreement to sell shares to Sycamore Partners, a U.S.-based private equity firm, at $11.45 per share, with the transaction expected to be finalized by the end of the year.


The deal values the company at approximately $10 billion (around 14.5 trillion KRW), as reported by the Wall Street Journal (WSJ). This is a significant decrease from its peak market capitalization of $100 billion (around 143 trillion KRW) in 2015, which has now shrunk to one-tenth of that value.


Founded in 1901 in Chicago, Walgreens has a rich history of 124 years and operates over 12,000 stores globally. It is the largest pharmacy chain in the U.S. However, Walgreens has been struggling with the underperformance of its core pharmacy business and declining in-store retail sales due to the growth of e-commerce, leading to store closures and structural adjustments.


Listed on the New York Stock Exchange since 1927, Walgreens was removed from the Dow Jones Industrial Average in February last year, replaced by Amazon, marking a significant shift in its market position.


With Sycamore’s acquisition, Walgreens will transition from being a publicly listed company to a privately held firm, marking the end of its 98 years as a publicly traded entity.


Sycamore Partners is known for its expertise in retail investments, having previously acquired Staples in 2017 for $7 billion (approximately 10 trillion KRW).


Following the announcement, Walgreens’ stock surged 7% on the New York Stock Exchange before trading was halted as the company prepared for its transition to a private company.

 

 

 

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