Here are five things to know:
1. CNBC’s David Faber upgraded the deal to “alive” on Feb. 18 after saying Jan. 27 that the deal was “mostly dead.” On Jan 31, Bloomberg reported that Sycamore had been in talks with private credit firms about debt financing for the potential deal.
2. In December, The Wall Street Journal reported that Walgreens could sell itself to private equity and become private in 2025. According to the Journal, the deal was complicated by a lawsuit filed by the Justice Department on Jan. 16 alleging Walgreens and its subsidiaries unlawfully dispensed millions of prescriptions in violation of the Controlled Substances Act.
3. Jeff Jonas, a portfolio manager at Gabelli Funds and a Walgreens investor, told Bloomberg that a prospective acquisition would be complicated because the drugstore chain carries a lot of debt, which makes a leveraged buyout challenging. He remains skeptical of a deal.
4. Walgreens announced Jan. 30 that it was suspending its quarterly cash dividend for the first time since 1932 as it reassesses capital allocation amid a long-term turnaround effort. Walgreens reported a $245 million operating loss in fiscal 2025’s first quarter, ending Nov. 30, far steeper than the $39 million loss recorded in the same quarter for fiscal 2024.
5. The news follows clinic closures across multiple states in 2025. In October, Walgreens announced in its fiscal fourth-quarter earnings report that it plans to close 1,200 locations over the next three years. This will include 500 closures in 2025, which should immediately support adjusted earnings and free cash flow.
