Is Private Equity Giant KKR Buying Walgreens Boots Alliance?

The private equity giant pitches a $70 billion buyout proposal for the drugstore chain.

Is KKR buying Walgreens Boots Alliance?

Based on a new buyout proposal, the answer could be “yes.” The private equity giant has put together a $70 billion proposal that would take the pharmacy benefits firm private. The math shows what could be the largest private equity deal in market history.

Is KKR buying Walgreens Boots Alliance?

It’s been three years since KKR offloaded its remaining shares of Walgreens from another buyout. The firm would need to work with other investors to secure the necessary capital. A $70 billion buyout of Walgreens would easily top the $45 billion buyout deal of TXU in 2007.

KKR purchased Alliance Boots in 2007 alongside a group of investors that included Stefano Pessina, then the company’s executive chairman.

In 2012, Walgreens purchased a 45% stake in Alliance Boots, then Europe’s largest pharmaceutical wholesaler. The $6.7 billion deal included an option to purchase the remaining stake. Walgreens executed that deal in 2014 for $15.3 billion. Pessina would go on to become the CEO of the larger company and has about a 16% stake.

The Financial Times suggests that senior management would take part in a deal to bring Walgreens private. Several reasons exist for Walgreens to accept a buyout deal.

Shares have fallen 20% over the last year. In addition, the broader healthcare retail and pharmacy benefits sectors remain under pressure. A deal would give it the chance to get out of the public eye as it shifts its strategy and focuses on the future. 

Blackstone Group Didn’t Expect a Deal

So: Is KKR buying Walgreens Boots Alliance?

A deal is possible. But Blackstone chief Stephen Schwarzman threw cold water on the possibility this week. Schwarzman said that a deal like this would be a stretch given current market conditions.

It might be possible. It’s a huge stretch doing things over $50 billion,” Schwarzman said at a conference in New York. “You need at least $20 billion of equity. Could you find that in today’s world? Maybe. Thirty billion of debt you could probably get. It’s a little tougher on the equity.”

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Alt Insights

January 16, 2020

ESG: Lately-turned Tesla Bull Jim Cramer Adds Fink To The Mix

ESG: Lately-turned Tesla Bull Jim Cramer Adds Fink To The Mix
Shape

Latest Alternative Investment News

Digital Assets: The Digital Dollar Foundation and Accenture Launch the Digital Dollar Project
January 17, 2020     Digital Assets, News

J. Christopher Giancarlo, former Chair of the Commodity Futures Trading Commission (CFTC), along with Charles Giancarlo and Daniel Gorfine, have joined hands with Accenture on the digital dollar, or US…

Digital Assets: In Reforms Push, China Mulling Rules for New Digital Banks, Including by Foreigners
January 17, 2020     Digital Assets, Regulations

China is working on guidelines for the establishment of online-only banks. Chinese regulators are pushing for the establishment of new, 100% digital banks to reduce risk in the country’s financial…

ESG: Cerulli Report Says 2020 To Be “Pivotal” For Retail ESG Investing
January 17, 2020     ESG and Sustainability, Special Reports

New regulations, products, and money will make 2020 a banner year for ESG in Europe Sustainable and responsible investing around the themes of Environment-Social-Governance (ESG) will come into its own…

The DailyAlts Playbook: Short Strategies for Tesla and Apple, where Ken Griffin was on Wednesday, Kyle Bass’ Hong Kong Worries, and the GAO’s Statement on Donald Trump
January 17, 2020     Investments, News, The DailyAlts Playbook

Today, the DailyAlts Playbook talks about short strategies for Tesla and Apple,  where Ken Griffin was on Wednesday, Kyle Bass’ Hong Kong worries, and the GAO’s statement on Donald Trump.