KKR offers Walgreens record buyout

Shares in Walgreens rise 6 per cent following $70bn offer from KKR, potentially the biggest private equity transaction in history

Shares in Walgreens Boots Alliance rose 6 per cent on Monday following news that it has received a buyout offer from KKR.

The global drugstore chain announced last week it was considering going private, but there were concerns over the cost involved as the company is worth over $70bn (£54.5bn, €63.5bn).

If this deal goes ahead with KKR it would be the biggest private equity transaction in history.

The American global investment firm already has strong links with Walgreens, as it took Alliance Boots private in 2007 for $22 billion, which was Europe’s largest ever leveraged buyout at the time.

KKR worked on the deal with the then Alliance Boots deputy chairman Stefano Pessina, who is now the executive vice chairman, CEO and biggest shareholder of Walgreens.

They brought the UK-based drugstore chain back to the public markets in 2012, when Walgreens bought 45 per cent of the company for $6.7bn.

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Four years later KKR reduced its stake in Walgreen Alliance Boots to 2.1 per cent, before selling its remaining shares later that year.

Walgreens shares fell nearly 20 per cent between January and October, before news of a potential buyout emerged. They rose 6 per cent on Monday November 11 when Bloomberg broke the story. The company currently has an equity market value of about $56bn and a net debt of about $15bn.

KKR is reportedly in talks with a number of its own investors to help it pull off the deal.

Walgreens Alliance Boots and KKR have declined to comment.

FURTHER READING: Walgreens considering biggest buyout in history

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