Sen. Elizabeth Warren (D-MA) is sounding the alarm over Walgreens Boots Alliance $10 billion sale to private-equity firm Sycamore Partners. The company has already been struggling, and Warren says the buyout could make things much worse for workers and customers alike.
Healthcare Access, Job Losses And Closures At Risk
Don't Miss:
- Your Last Chance to Invest in Pacaso Before Their Global Expansion — Offer Ends Sept 18
- Kevin O'Leary Loves ‘Wonderful Recurring Cash Flows' — These Small Industrial Assets Deliver Just That
“Walgreens just got taken over by private equity. Private equity has a record of running companies into the ground,” Warren said last week in a post on X. She warned that Walgreens “could be the latest victim: closing more stores, service plummeting, workers losing their jobs, and eventually bankruptcy.”
In a letter dated April 29, Warren demanded answers from Sycamore Managing Director Stefan Kaluzny. She warned that the buyout could be particularly damaging in Massachusetts, where Walgreens has already closed six stores and plans to shut down nine more. Many of those locations are in vulnerable communities, she said, and could leave residents in “pharmacy deserts” without reliable access to medication or care.
Warren also pointed out that Walgreens has been losing money despite growing sales and prescriptions. The company reported a net loss of $8.6 billion in fiscal year 2024, nearly triple the previous year's losses, and only 70% of its 8,500 U.S. stores were profitable.
Trending: From Chipotle to Red Bull, Top Brands Are Already Building With Modern Mill's Tree-Free Wood Alternative — Here's How You Can Invest Too
She criticized Sycamore’s use of debt to finance the deal, calling it a “leveraged buyout tactic” that "saddles private equity-owned companies with substantial debt, often draining resources that could otherwise be invested in innovation, workforce development, or adapting to market changes."
According to a review by the Private Equity Stakeholder Project, 83.4% of the Walgreens acquisition is being funded through debt—more than double the typical level used in similar deals. Warren asked Sycamore whether it plans to close more stores, lay off employees, or sell Walgreens' real estate for short-term gain.
Warren ended her letter by asking Sycamore to commit to avoiding payouts or bonuses until Walgreens is profitable again. "Far too often, private equity buyouts ruin already-struggling companies and produce devastating consequences for workers and communities," she wrote.
See Also: Wealth Managers Charge 1% or More in AUM Fees — Range's AI Platform Does It All for a Flat Fee (and Could Save You $10,000+ Annually). Book Your Demo Today.
Sycamore Says It's Investing For The Long Term
Sycamore completed the Walgreens deal on Aug. 28. Kaluzny said in a statement that the company sees Walgreens and its affiliates as "essential" to the communities they serve. He added that Sycamore will work with the management teams to "enhance the customer experience."
Walgreens Boots Alliance shareholders of record received $11.45 per share, with the possibility of an extra $3 per share depending on the future sale of Walgreens' stake in VillageMD.
Warren is continuing to push her Stop Wall Street Looting Act, a bill that would make private- equity firms more accountable for the harm they cause. Until then, she says, communities remain vulnerable.
Read Next: ‘Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. You can invest today for just $0.30/share.
Image: Imagn Images
