Walgreens Boots Alliance explores record private takeover

By Becky Bargh 6-Nov-2019

The health and beauty giant is said to be in talks with private equity firms regarding a takeover

Walgreens Boots Alliance is exploring options to go private, in what could be the biggest takeover in history.

According to people close to the company, as reported by Reuters, Walgreens has held preliminary discussions with private equity firms and has tasked investment bank Evercore Partners with exploring potential deals.

The US-based drug store chain has a market value of US$55m but, according to the Financial Times, could fetch $70bn in a deal.

A leveraged buyout for its Walgreens pharmacy chain would likely require several private equity firms, while Walgreens CEO Stefano Pessina could offer his 16% share to finance the sale.

The news comes less than 12 months after the pharma giant announced the details of its transformational cost management programme, which is expected to deliver $1.5bn of annual cost savings by fiscal 2022.

As part of the initiative, the company’s high street retailer Boots has been closing stores across the UK and laying off employees from its Nottingham headquarters.

Meanwhile, retail competition and changing drug prices have resulted in lower than forecast profits for the fiscal year.

Last month, Walgreens Boots Alliance announced its net earnings plummeted by more than 20%, while net earnings per share dropped 14.6% to $4.31 compared with the previous year.

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Walgreens Boots Alliance declined to comment on the takeover.