The ownership of Walgreens Boots Alliance has been dramatically transformed by the multibillion-dollar takeover by private equity group Sycamore Partners. Walgreens Boots Alliance will no longer be publicly traded on the Nasdaq stock exchange in New York following the $23.7 billion (£18.37 billion) deal. Instead, it will fall into private ownership under the control of Sycamore Partners, a retail investment specialist.
For nearly a century, Walgreens Boots Alliance has operated as a publicly listed entity. This acquisition signals a major change, potentially altering the future of the well-known high-street pharmacy chain, Boots. While the specific impact on the 1,800 Boots stores across the UK remains uncertain, industry experts suggest the deal could lead to an auction or a sell-off of the business.
Shareholders will be paid $11.45 (£8.86) a share under the deal, with the potential for a further $3 (£2.32) a share depending on the satisfaction of specified conditions. Private equity houses generally buy companies with the intention of improving financial performance before selling them on to make a profit, leaving it to be seen what the longer-term plan will be for Boots in its new ownership.
This action comes on the heels of a trend of private equity investments in large UK retailers, with supermarkets such as Morrisons and Asda also facing similar takeovers. The future direction for Boots, though, is unclear. The company had earlier contemplated a sale in 2022 but dropped the idea due to poor conditions in debt-financing markets.
The pharmacy chain has encountered various difficulties over the last few years. In 2023, it reported the shutdown of 300 stores, an indication of more widespread problems within the retail and pharmaceutical sectors. Walgreens Boots Alliance has also had its share price fall by 90% since 2015, indicating financial troubles that could have been a factor in selling.
Established in 1849 by John Boot, the company originally dealt in the sale of herbal medicines. Now, Boots has a huge chain of pharmacies and opticians throughout the UK, employing around 51,000 individuals. With such a long-established presence in British retailing, any major change to its ownership or structure will inevitably cause alarm among staff and industry players.
The Pharmacists’ Defence Association (PDA) has recognized these issues, specifically the implications of private equity ownership. The union pointed out the possibility of changes in operations but stressed that change in itself is not inherently bad. “It can be hoped that any future new owners would only implicitly purchase a business that they feel they can derive more value from, so at some level change will ensue, but that does not have to be negative. as a big organisation, pharmacists in Boots are already accustomed to witnessing large-scale change,” the PDA said.
The PDA also appealed to the regulating bodies, like the General Pharmaceutical Council (GPhC) and the NHS, to watch the situation carefully to ensure that public access to pharmacy services remains uninterrupted. It is important to maintain high standards within the network of community pharmacies, particularly given ongoing changes in ownership and business strategy.
There is still speculation regarding Boots’ future direction and role in the UK retail sector after the transition to private ownership. Only time will tell whether Sycamore Partners will choose to invest in renewal efforts, divest portions of the business, or reorganize. In the meantime, industry experts, employees, and shoppers will be watching closely for the impact of this giant business shift.
