Walgreens may be exploring $4B-plus sale of Shields Health Solutions

Walgreens Boots Alliance Inc., which has had a turbulent year of high debt and executive departures, is exploring options including the potential sale of Shields Health Solutions, the specialty pharmacy business which the retailer acquired three years ago and in which it has a majority stake, according to reporting from Crain’s Chicago Business, which cites people familiar with the matter. 

The business could be valued at more than $4 billion in a sale, said those people, who asked to not be identified because the details aren’t public. 

A representative for Walgreens declined to comment to Supermarket News.

Walgreens has struggled this past year with high debt and a slew of C-suite exists, including former CEO Roz Brewer.

When current Chief Executive Officer Tim Wentworth took over Walgreens in October, he announced a $1 billion cost-cutting effort that also included lowering capital expenditures by around $600 million.

In the company’s most recent quarterly report, Wentworth stressed that the company was “evaluating all strategic options” to shore up costs and increase cash flow.

During that same earnings call, Walgreens announced it would nearly halve its stockholder dividend. The retailer has also revived plans to exit its international Boots chain — a move which could land Walgreens close to $8.8 billion, according to reporting from Bloomberg News.

Related:Walgreens will pay Humana $360M in drug pricing settlement

Specialty pharmacies like Shields Health aid health care providers in offering care to patients who have more chronic, complex conditions like cancer. Over the past several years, Walgreens took control of the business through a series of transactions, largely driven by Brewer who at the time, was seeking to acquire businesses that would boost the retailer’s presence in primary care and other aspects of the health care industry.

Walgreens acquired a minority stake in the company in 2019, took majority control in 2021, and bought out the last 30% for $1.37 billion in 2022, according to reporting from Crain’s.

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Walgreens, which has had a turbulent year of high debt and executive departures, is exploring options including the potential sale of Shields Health Solutions, the specialty pharmacy business which the retailer acquired three years ago and in which it has a majority stake. Pharmacy retailers have made a push over the last several years to get involved in more patient care, but with three of the major drug store chains struggling financially (Walgreens, CVS, Rite Aid), are these investments ultimately going to pay off? 

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Related:Walgreens slashes dividend, Q1 results beat analyst expectations