S Poddar
Walgreens Boots Alliance has been bought by private equity company Sycamore Partners in a multi-billion-dollar deal, representing a dramatic change in the ownership of the company. The $23.7 billion (£18.37 billion) deal will see Walgreens Boots Alliance cease to be publicly listed on the Nasdaq stock exchange in New York. Instead, it will move into private ownership by Sycamore Partners, a company that specializes in retail investments.
Since almost a century, Walgreens Boots Alliance has been a publicly traded company. This takeover indicates a significant change, which might reshape the future of the renowned high-street pharmacy chain, Boots. Though the exact influence on the 1,800 Boots stores across the UK is unclear, the deal might precipitate an auction or sell-off of the firm, according to industry analysts.
Shareholders will be paid $11.45 (£8.86) per share under the deal terms, with the potential for up to an additional $3 (£2.32) per share, depending on certain conditions. Private equity companies acquire companies with a view to improving profitability before selling them on at a profit, which will raise questions about the long-term plan for Boots in its new ownership.
The development comes at a time when private equity firms are making investments in large UK retailers, with the likes of Morrisons and Asda also facing the same. Yet, the future for Boots is still unclear. The organization had earlier planned for a sale in 2022 but shelved it as debt-financing markets were not so favorable.
The chain pharmacy has experienced some challenges over the last few years. It revealed in 2023 the shutdown of 300 shops, mirroring wider challenges in the retail and pharmaceutical sectors. Furthermore, Walgreens Boots Alliance has witnessed its share price drop by 90% since 2015, highlighting financial challenges that could have informed selling the business.
Established in 1849 by John Boot, the company started life selling herbal remedies. Now, Boots has a huge network of UK pharmacies and opticians with around 51,000 staff members. With its long-standing presence in British retail, any major shift in its ownership or structure inevitably causes alarm among staff and retail industry commentators.
The Pharmacists’ Defence Association (PDA) has recognized such issues, notably those of private equity ownership. The union has raised the threat of changes to operations but made clear that change per se is not bad. “It is safe to assume that any possible new owners would implicitly only purchase a business which they feel they can extract more value from, so change will follow at some level, but that does not have to be a bad thing. as a big organisation, pharmacists at Boots are already accustomed to viewing substantial change,” the PDA said.
Also, the PDA called for monitoring by regulatory authorities, such as the NHS and the General Pharmaceutical Council (GPhC), to ensure that public access to pharmacy services is not disrupted. High standards must be upheld within the community pharmacy network, especially during continued changes in ownership and business strategy.
With the ownership shift to the private sector, speculation continues over what is to come for Boots and its future in the UK retail market. Whether Sycamore Partners will choose to reorganize, sell portions of the business, or reinvest in refresh efforts remains unknown. For now, workers, shoppers, and industry experts alike will be looking on closely to measure the influence of this remarkable corporate change.
