What to know in Michigan amid Walgreens Boots Alliance deal

On Mar 8, 2025

A $10 billion deal will see Walgreens Boots Alliance go private as Sycamore Partners acquires the company.
Michigan is home to more than 200 Walgreens locations.

Michigan’s pharmacy landscape soon will see Walgreens go private in a $10 billion deal with Sycamore Partners, but company officials say the pharmacy chain will continue to operate normally.

The move will close out nearly a century of trading on public markets for the pharmacy chain, operated by Walgreen Boots Alliance, with the acquisition announced Thursday. Walgreens has more than 200 locations in Michigan.

“Our trusted brands and deep commitment to our customers, patients, communities and team members have and will continue to anchor our business as we realize our goal of being the first choice for pharmacy, retail and health services. I am grateful to the more than 311,000 team members globally who are fiercely committed to WBA, our customers and patients,” said Tim Wentworth, CEO of Walgreens Boots Alliance.

The Company will continue to operate under Walgreens, Boots and its portfolio of consumer brands, the company said in a release. It said WBA would maintain its Chicago headquarters.

Walgreens operates more than 200 pharmacies in Michigan.

The purchase is expected to close in the fourth quarter of 2025, the company said.

The company also said the agreement also opens a 35-day window during which WBA can seek alternative offers.

Here’s what to know:

What is happening at Walgreens?

Walgreens will be purchased by Sycamore Partners, a private equity firm that specializes in retail and consumer investments, for $10 billion. Sycamore will pay $11.45 per share, a premium of 8% to the stock’s closing price of $10.60 on Thursday. Shares of the company rose nearly 6% in extended trading.

Walgreens shareholders could receive an additional $3 in cash from future monetization of the company’s debt and equity interests in VillageMD.

What led to the purchase?

Walgreens has been suffering from reduced cash flow and more than half of its $7 billion in net debt is due next year.

The company is closing thousands of stores and has embarked on a $1 billion cost-cutting program under CEO Tim Wentworth, with some success.

The chain currently employs 311,000 people in 12,000 stores in eight countries, according to its website, a sharp decline from the 25 countries, 450,000 employees and 21,000 stores it had four years ago, the release said.

How did missteps hurt Walgreens?

Many of the company’s missteps were under former CEO Stefano Pessina, also its largest single shareholder, whose 2007-14 tenure at the helm saw Walgreens’ market capitalization shrink to less than $50 billion.

In 2012, Walgreens announced a $5.2 billion investment in primary-care provider VillageMD. That proved to be a cash drain and is now a good exit candidate for Sycamore.

Two years later, Walgreens concluded a two-step acquisition of Swiss-based Alliance Boots, a pharmacy-led health and beauty group that is now considered by analysts as a likely candidate for a spin-off.

The company stuck to its buying spree even after Pessina, snapping up almost 2,000 stores from its former rival Rite Aid Corp in 2018. But that store footprint proved too big and soon after the acquisition, Walgreens started to close locations.

There were also missed opportunities. While its top rival CVS has diversified its business beyond retail, including acquiring U.S. health insurer Aetna for almost $70 billion in 2018, Walgreens turned away from buying insurer Humana.

How did Walgreens’ finances falter?

The company’s market value has shrunk to just more than $9 billion from almost $100 billion a decade ago as margins on drug prices fell and consumers shifted to cheaper rivals Amazon and Walmart to fill their prescriptions and purchase toiletries.

And when rivals diversified into insurance or prescription management, Walgreens invested billions in buying other pharmacy chains despite the trend away from in-store shopping.

As a result, the second-largest U.S. pharmacy chain’s debt and lease obligations have ballooned to almost $30 billion.

“You have a business that is shrinking, and then you layer on losses and cash burn, all of that was the perfect recipe for what we are seeing today,” said Brian Tanquilut, a health care services research analyst with Jefferies bank.

What is Sycamore Partners’ background?

Sycamore Partners is a private equity firm based in New York. The firm specializes in consumer, distribution and retail-related investments and partners with management…