Walgreens Shareholders Approve $10 Billion Buyout Offer from Sycamore Partners
Walgreens Boots Alliance shareholders Friday approved private equity firm Sycamore Partners’ $10 billion buyout offer for the iconic drugstore chain.
First announced in March, the deal approved by shareholders calls for the private equity firm Sycamore Partners to pay $11.45 per share — 29% above the December stock price for Walgreens. Sycamore also agreed to “one non-transferable right” to receive up to $3 in cash per Walgreens share “from the future monetization of WBA’s debt and equity interests in VillageMD, which includes the Village Medical, Summit Health and CityMD businesses,” the companies said of Walgreens’ primary care businesses.
About 96% of votes cast were in favor of the merger agreement proposal, according to a preliminary tally released Friday morning at a special meeting of shareholders.
“We appreciate the consideration and overwhelming support from our shareholders in our value-maximizing transaction with Sycamore,” Walgreens chief executive officer Tim Wentworth said after the shareholder vote was disclosed. “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.”
Walgreens still expects to close the transaction in the third or fourth quarter of this year, “subject to customary closing conditions, including the receipt of required regulatory approvals,” the company said Friday.
The deal, rumored for months, comes after Walgreens, which had a market value of more than $100 billion a decade ago, undertook a failed in-store clinic rollout that led it to close hundreds of stores to reduce debt and stem financial losses.
Under former chief executive Roz Brewer, Walgreens spent billions of dollars investing in and operating physician-staffed clinic operator VillageMD.
Walgreens invested more than $6 billion in VillageMD under Brewer to take a controlling stake, but the company has already scaled back dramatically on the expansion of doctor practices and clinics the company opened. In 2020, Walgreens said it planned to open 500 to 700 “Village Medical at Walgreens” physician-led primary care clinics in more than 30 U.S. markets over five years, with the “intent to build hundreds more thereafter.”
But Wentworth, who replaced Brewer in October 2023, said a year ago that the company and its partner VillageMD had slowed the number of clinic openings in part because the operators haven’t been able to fill their “patient panels,” which are a certain number of individual patients under the care of a specific provider. The billions of dollars in losses on the VillageMD investment was largely to blame for a net loss of more than $8 billion for the company’s fiscal 2024.
