The U.S. owner of Boots is set to go private in a $10 billion (£7.8 billion) deal, bringing further uncertainty for thousands of employees at the UK-based pharmacy chain.
Walgreens Boots Alliance, which operates over 1,800 Boots stores in the UK, has been sold to U.S. private equity firm Sycamore Partners. The pharmacy chain has struggled in recent years as more customers shift to online shopping for lower prices.
Walgreens’ market value has plummeted by 90% since 2015, now standing at $9.3 billion, with additional debt and lease obligations of $30 billion. Sycamore Partners has agreed to acquire Walgreens Boots Alliance for $11.45 per share, giving the deal an equity value of approximately $10 billion.
Sycamore is expected to retain Walgreens’ U.S. retail operations while selling or spinning off the remaining assets, including Boots. The UK chemist chain, which traces its origins to John Boot’s first store in Nottingham in 1849, employs over 50,000 people, including at its Nottingham headquarters. Many of these employees now face continued uncertainty following years of speculation about the company’s future ownership.
In a letter to staff obtained by The Guardian, Ornella Barra, head of Walgreens’ international business, called the acquisition a “significant development” but reassured employees that “nothing is changing today.”
Walgreens previously attempted to sell Boots in 2022, seeking up to £10 billion, but abandoned the plan after potential buyers—including Mukesh Ambani’s Reliance Industries, U.S. private equity firm Apollo Global Management, and Asda’s owners TDR Capital—failed to secure sufficient funding. A separate plan to take Boots public at a valuation of around £7 billion was also dropped last year.
Russ Mould, investment director at AJ Bell, suggested that Sycamore would likely seek a quick sale of Boots to another private equity firm, as the firm “will care more about making money now rather than later.” However, he warned that UK retail faces “considerable headwinds,” including rising costs and low consumer confidence amid ongoing global economic and political instability.
Concerns are also growing over the future of WH Smith’s high street presence, as its parent company considers selling off more than 500 stores to focus on its more profitable travel retail division.
Despite these challenges, Boots has made strategic improvements in recent years, including lowering prices, closing hundreds of aging stores, and expanding its beauty range to capitalize on growing consumer demand for cosmetics. The company could also benefit from the Labour government’s plans to expand the role of pharmacies in primary healthcare.
Walgreens first acquired a stake in Boots in 2012 before completing a full buyout in 2014. During the COVID-19 pandemic in 2020, Boots cut around 4,000 jobs—roughly 7% of its workforce—and shut nearly 50 of its optician branches.
Two years ago, Boots announced the closure of 300 stores as part of efforts to “evolve” its retail footprint, a process it completed by the end of last year.
The deal with Sycamore Partners marks the end of Walgreens’ 98-year tenure as a publicly listed company. However, as the second-largest pharmacy chain in the U.S., Walgreens still has 35 days to consider or accept competing bids.
As part of the agreement, Italian billionaire Stefano Pessina, Walgreens’ executive chair and largest shareholder, will retain a minority stake in the business. In a message to staff, Ornella Barra confirmed that Pessina would remain a significant shareholder alongside Sycamore.
Pessina played a key role in creating the transatlantic pharmacy giant, merging U.S.-based Walgreens with Europe’s Alliance Boots in 2014. He had initially taken a 45% stake in the business in 2012, paying £4.3 billion before completing the full merger.
