Deerfield-based Walgreens Boots Alliance Inc., led by Chief Executive Officer Stefano Pessina, has been reviewing a potential deal to take the company private in what could become the largest leveraged buyout in history, people familiar with the matter said.
The company has recently held informal talks with private equity firms, the people said, asking not to be identified because the information is private. Pessina is Walgreens Boots's largest shareholder with a stake of about 16%, according to data compiled by Bloomberg.
The global pharmacy chain has a market value of about $57 billion. At that size, a take-private of the company would top the largest leveraged buyout in history: the 2007 sale of utility TXU Corp. to KKR & Co. and TPG, which was worth about $45 billion including debt, according to data compiled by Bloomberg.
Some of the buyout firms have so far shown reluctance to participate in a transaction, the people said. It's unclear how feasible the transaction would be, and the company could decide against pursuing the idea, the people said.
Pessina didn't immediately respond to an email and phone call seeking comment. A representative for Walgreens Boots declined to comment.
The talks come amid intense consolidation across the health care space, as providers look to pair up to diversify and counter tepid growth. CVS Health Corp. closed its $70 billion purchase last year of health insurer Aetna Inc.
Walgreens, which operates more than 18,750 stores in 11 countries, has been in the process of cutting costs in response to reimbursement cuts and lower price increases for branded drugs, as well as competition from chains like CVS and online services. Last week, the company raised its 2022 annual savings target to $1.8 billion, up from $1.5 billion and announced it would close nearly 40% of the clinics in its stores and cut jobs in its corporate facilities,
Pessina took the reins after Walgreen Co. acquired the part of Alliance Boots that it didn't already own for about $15.3 billion in 2014. He previously ran Alliance Boots, which he had acquired with private equity firm KKR & Co. in 2007.
Walgreens Boots' wholesale arm has more than 400 distribution centers that deliver to more than 240,000 pharmacies, doctors health centers and hospitals annually. It operates Walgreens and Duane Reade stores in the U.S. and Boots stores in Europe and Asia.
The company had sought to buy rival Rite Aid Corp. In 2017, the companies scrapped the merger amid regulatory concerns that it would hurt competition in the U.S. drugstore market. Walgreens Boots instead bought roughly 2,000 stores from Rite Aid.