The US owner of the Boots pharmacy chain is being taken over by a private equity firm in a $10bn (£7.8bn) deal.
The price being paid for Walgreens Boots Alliance is a fraction of what the company was worth a decade ago, reflecting its struggles with growing debt and shoppers going online for cheaper products.
There have been reports that the Boots chain could be sold off seperately by its new owner, US private equity firm Sycamore Partners.
Walgreens chief executive Tim Wentworth said the firm was navigating the “challenges of a rapidly evolving pharmacy industry and an increasingly complex and competitive retail landscape”.
“While we are making progress against our ambitious turnaround strategy, meaningful value creation will take time, focus and change that is better managed as a private company,” he added.
George Godber, fund manager at Polar Capital, told the BBC’s Today programme that Boots had been “in and out of different ownership for some time” and that “its business model has struggled”.
“People are buying more of those personal healthcare brands online than they are in the shop.”
There are now 1,900 Boots stores left in the UK after the pharmacy chain began closing shops in June 2023.
Sycamore Partners is paying $11.45 per share for Walgreens Boots Alliance, which is more than its shares are currently worth on the US stock market.
Walgreens shares rose by nearly 6% in extended trading in New York. But the company’s stock market value has fallen by around 80% over the past five years.
The deal is expected to be completed by the end of this year.
The Illinois-based Walgreens took a 45% stake in Boots in 2012.
It bought the remainder of the firm two years later in a deal that valued Boots at around £9bn.
Walgreens is also made up of its namesake US retail business, specialty pharmacy group Shields Health Solutions and healthcare provider VillageMD.
In recent years, the company has faced mounting challenges as customers turned to cheaper rivals.
In 2022, Walgreens put Boots up for sale but later dropped these plans, saying potential buyers had been unable to raise enough funds.
In October, it announced plans to shut 1,200 Walgreens stores in the US over the next three years under a cost-cutting programme.
