After Walgreens announced a few months ago that it would be closing over a thousand stores in the United States, the company has informed that it reached a definitive agreement to be acquired by another firm, which has raised questions about what will happen with the rest of the pharmacy chain’s locations. Here’s everything we know about it.
Who will buy Walgreens?
According to the company’s statement, it will be acquired by private equity firm Sycamore Partners, which will pay $11.45 per share in cash. Additionally, the sale of the primary care chain VillageMD is under consideration; this deal is expected to be finalized by the end of the year’s fourth quarter.
The acquisition of Walgreens by Sycamore Partners also includes a 35-day period during which the pharmacy chain has the option to receive additional offers.
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What will happen to Walgreens after being acquired by Sycamore Partners?
Sycamore Partners has decided that Walgreens’ operations will be managed from its headquarters in the Chicago metropolitan area. In a statement, Tim Wentworth, CEO of Walgreens, emphasized that the conversion to a private company will make it easier to implement strategic changes more efficiently.
“While we are making progress on our ambitious recovery strategy, creating significant value will take time, focus, and changes that are best managed as a private company,” he said.
Meanwhile, Stefano Pessina, executive chairman of Walgreens and holder of 17% of the company’s shares, will remain a key figure in this new phase, as he has agreed to reinvest his stake in the company as part of the deal with Sycamore.
Why is Sycamore Partners buying Walgreens?
Since late 2024, the retailer began a strategic plan to reduce costs due to the decline in consumer spending, a situation that has left the pharmacy chain without the necessary resources to cover expenses related to rent, staff, and basic supplies.
Additionally, the company faces several challenges, including a decrease in drug reimbursements, rising operational costs, and increasing competition from online retailers such as Amazon, Walmart, and Target.
As a result, it announced the closure of 1,200 stores over the course of three years. The closure process will begin in fiscal year 2025 with 500 locations, 17 of which have already ceased operations between February 17 and 27.
Which pharmacies have closed?
The closures that occurred in February of this year took place in the states of Illinois and California, with the latter being the most affected. According to reports, these are the 12 San Francisco locations that closed last month:
- 1201 Taraval Street
- 3201 Divisadero Street
- 1363 Divisadero Street
- 825 Market Street
- 1750 Noriega Street
- 5280 Geary Boulevard
- 1524 Polk Street
- 1301 Franklin Street
- 1189 Potrero Avenue
- 135 Powell Street
- 1630 Ocean Avenue
- 5300 3rd Street
Meanwhile, in Chicago, Illinois, five pharmacies closed:
- Western Avenue in West Englewood
- 26th Street in La Villita
- Commercial Avenue in South Chicago
- King Drive in Lake Meadows
- Jeffery Boulevard on the South Side
What type of pharmacy is it?
The company specializes in selling prescription medications, health and wellness products, photography services, and health-related information.
How many Walgreens pharmacies are there in the United States?
As of fiscal year 2024, the company operated a total of 8,560 locations in the United States, including retail stores and healthcare centers, located in the U.S., Puerto Rico, and the Virgin Islands. However, with this year’s closures, the chain will have just over 7,000 locations.
In which countries does Walgreens operate?
Besides the United States, the pharmaceutical company has offices in several countries around the world, including the United Kingdom, Ireland, Switzerland, Germany, Italy, Thailand, China, Japan, Mexico, Chile, and the Netherlands.
