Walgreens Boots Alliance Negotiates Privatization Amid Rising Stock Prices and Legal Success; Inventories increase by 25%

According to The Wall Street Journal, Walgreens Boots Alliance (WBA, Financials) is talking to private equity firm Sycamore Partners about a possible purchase that would take the company private.

If approved, the agreement could be completed as early as next year. The revelation stoked investor hopes, causing Walgreens shares to rise 25% on Tuesday, their biggest one-day percentage gain on record.

Separately, Walgreens, along with CVS Health Corp (CVS, Financials) and Walmart (WMT, Financials), won a key legal battle when the Ohio Supreme Court declared that companies cannot be held responsible for the opioid crisis in two Ohio counties. This lawsuit overturns a $650.9 million judgment previously awarded against pharmacy networks. The decision marks a turning point in the ongoing legal battle over the drug problem.

Walgreens announces intention to close 1,200 stores by 2027, still struggling with financial constraints. Citing decreased reimbursement rates for prescriptions and changes in customer behavior, the company plans to close 500 locations in the 2025 fiscal year alone. The closures are part of a larger attempt to simplify processes and adapt to changing market realities.

These developments follow industry trends. According to a new report in Health Affairs, nearly thirty percent of American drugstores closed between 2010 and 2021, having a disproportionate impact on disadvantaged areas. Under financial pressure, major chains like Walgreens, CVS and Rite Aid are closing unprofitable stores.

This article first appeared on GuruFocus.