Shareholders approve Walgreens' sale to Sycamore Partners

Shareholders for Walgreens Boots Alliance overwhelmingly voted to approve the company’s sale to Sycamore Partners, with 96% of shareholders at a special meeting voting to green-light the merger, estimated at $23.7 billion.

The initial merger announcement was made on March 6, and at that time it was determined that WBA shareholders will receive $11.45 per share in cash at closing, and one non-transferable Divested Asset Proceeds Right to receive up to an additional $3 in cash per share from the future monetization of WBA’s debt and equity interests in VillageMD, which includes the Village Medical, Summit Health and CityMD businesses.

Walgreens expects to close the transaction in the third or fourth quarter of this year, subject to the usual closing conditions and regulatory approvals.

WHAT’S THE IMPACT

Leveraging WBA's healthcare expertise and Sycamore's established leadership in retail and consumer services, WBA will be better positioned to become the first choice for pharmacy, retail and health services, Walgreens said. 

The company will continue to operate under the Walgreens, Boots Duane Reade, No7 Beauty Company and Benavides names. WBA will maintain its headquarters in the Chicago area.

The Wall Street Journal first reported in December that Sycamore was in talks to take Walgreens private. The deal was then considered dead.

In February, the sale was considered on again after CNBC's David Faber said on air that the pharmacy chain may be sold to New York-based private equity firm Sycamore Partners.

Walgreens has suffered losses due in large part to VillageMD. Plans for expansion of the primary care network were scrapped in late 2023, Walgreens announced a $1 billion cost-cutting initiative. This included the closure of more than 60 VillageMD clinics, a number that grew to 160. 

THE LARGER TREND

CVS Health has also suffered profit setbacks from operating losses but has been cushioned by its pharmacy benefit manager Caremark, according to Seeking Alpha.

Walgreens has approximately 12,500 locations across the U.S., Europe and Latin America and employs approximately 311,000 people globally.

ON THE RECORD

“We appreciate the consideration and overwhelming support from our shareholders in our value-maximizing transaction with Sycamore,” said Tim Wentworth, chief executive officer of Walgreens Boots Alliance. “With Sycamore’s partnership, we will be better positioned to accelerate our turnaround strategy, further enhance the customer, patient and team member experience and become the first choice for pharmacy, retail and health services. We look forward to closing the transaction and entering this next chapter.”