WALGREENS is finalizing a deal to sell to a private equity firm in a bid to salvage the embattled pharmaceutical chain.
The deal comes as the drug store company faces ongoing financial issues, with the firm confirming that just one in four stores are profitable as it seeks to shutter another 450 locations.
2
The multi-billion-dollar deal is scheduled to be completed as soon as Thursday, following the steady decline of Walgreens' value over the past few years.
Should Walgreens and Sycamore complete the deal, the $10 billion agreement is thought to maintain the core US retail business.
However, it would mean selling off or taking public the other parts of the company.
The core of the business would remain, but it is unknown if the name Walgreens will be kept.
read more on walgreens
These talks have been ongoing since December 2024.
Under CEO Tim Wentworth, Walgreens has scaled back its healthcare operation and instead committed to putting the retail business on firmer ground.
The main way of doing this has been closing unprofitable stores.
In early January, Wentworth said Walgreens expected to significantly increase the speed of its store closures.
Most read in Money
LET ME INCVS promises probe as worker CLOSED store early after shopper waited in long line
STAND UPSam's Club has an elegant 3-tier stand for $24.98, it's great for a Spring party
CHECK PLEASENew $5,108 Social Security payments heading out in hours thanks to new rule
QUAINT QUARTERSAmazon is selling a 'budget' tiny home for $6,499 - it has up to 3 bedrooms
He also added that Walgreens had identified the next 450 stores it aims to shutter.
Executives have been discussing Sycamore paying between $11.30 a share and $11.40 a share in cash, per The Wall Street Journal.
Walgreens to Shut Down 150 Stores in 2024: Impact and Reasons
The price could increase later on if Walgreens reaches specific targets under the ownership of Sycamore.
This is a landmark moment in Walgreens' near 120 year public history, as it would be the first time the company is off public markets.
Walgreens shares have been public since 1927.
Their shares have been on a downward spiral for nearly a decade.
From 2015 to 2024, Walgreens' market value has gone from more than $100 billion to under $8 billion.
US braces for '45,000 store closures'
Some 45,000 bricks-and-mortar stores could close in the next five years, experts have warned.
Several major retailers have announced store closures or gone out of business altogether in recent years.
In 2023, chains such as Foot Locker announced plans to close up to 400 outlets by 2026.
While, other well-known retailers like Tuesday Morning and Mitchell Gold + Bob Williams filed for bankruptcy in 2023.
Bed Bath & Beyond has closed all of its brick-and-mortar stores and is now an online-only retailer.
The most affected retailers have been clothing, consumer electronics, sporting goods, hobby, book, music, and home furnishing stores since the start of 2019.
UBS has predicted the total number of retail stores will drop by 45k from 958k to 913k.
Despite that, the report says that certain stores should thrive while others decline.
It said retailers such as Walmart, Costco, Home Depot, and Target, could be among the winners.
Walgreens has felt long-running squeeze on margins in its core prescription business.
The business decided to double down despite the losses, while at the same time, its rival CVS diversified into insurance and pharmacy benefits.
In late January, more trouble hit Walgreens after they were sued by the Justice Department, after it was alleged that it contributed to the opioid crisis by inappropriately dispensing millions of pills.
It is unknown when the extra 450 stores are slated to close, and what the exact status of the Sycamore deal is.
Sycamore is a New York-based firm that specializes in retail and consumer investments.
In September, it bought the açaí and smoothie chain Playa Bowls.
Read More on The US Sun
They also purchased Staples in 2017 for $6.9 billion before splitting up the business.
As of Monday, Walgreens' market value was around $8.9 billion.
2
