Report: Sycamore Partners in Talks to Acquire Walgreens

Sycamore Partners is in talks to acquire struggling drugstore chain Walgreens Boots Alliance Inc., according to people familiar with the matter.

The New York-based private equity firm has been having ongoing discussions about a deal to take Walgreens private, said the people, who asked to not be identified because the details aren’t public. It’s possible discussions could fall through without a deal materializing, the people added.

The stock jumped as much as 28 percent on the news, which was first reported by the Wall Street Journal. That was its biggest single-day gain since at least 1980. Walgreens shares had lost two-thirds of their value over the course of the year through Monday. That’s the worst performance of any stock in the S&P 500.

The stock was up 20 percent at 1:48 pm in New York Tuesday, giving the company a market value of about $9.2 billion.

Representatives for Walgreens and Sycamore Partners declined to comment.

In October, the pharmacy chain said it would be closing some 1,200 outlets over the next three years after posting a $3 billion loss in the fourth quarter on charges related to opioid liabilities and the write-down of an investment in China. The company’s retail division has struggled amid the rise of online retailers like Amazon.com and discount giants Dollar General and Costco.

Walgreens has been a take-private candidate for years. KKR & Co. formally approached the drugstore giant about a deal in 2019 in partnership with current chairman and biggest shareholder Stefano Pessina when the firm had a market value of $56 billion. Sycamore Partners has a history of acquiring retailers that have seen better times, including office supplier Staples Inc. and department-store chain Belk Inc.

By Gillian Tan and Cynthia Koons

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Walgreens Plans to Shutter 14% of US Stores Over Three Years

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