KKR may acquire Walgreens Boots Alliance in 70-bn dollar deal

The New York-based private equity firm has been preparing a proposal to potentially buy out shareholders of Walgreens Boots, said the people, who asked not to be identified because discussions are private. It’s unclear how feasible the transaction would be, given the need for large amounts of financing, and Walgreens Boots and KKR could decide against pursuing a deal, the people said.

Walgreens Boots shares rose 6.3 per cent to $63.02 at 10.09 am in New York trading. Its bonds in Europe fell.

Walgreens Boots, led by CEO Stefano Pessina, has been reviewing a potential deal with a financial adviser to take the company private amid buyout interest, the media reported last week. Some buyout firms looked but decided against pursuing such a big deal, people with knowledge of the matter said at the time. There’s no certainty the deliberations will lead to a definitive takeover offer, the people said. A representative for KKR couldn’t comment, while a representative for Walgreens Boots declined to comment.

It was earlier reported that Walgreens Boots Alliance Inc has been exploring whether to go private following private equity interest in the US drug store chain, which has a market value of more than $55 billion, according to people familiar with the matter.

Walgreens had tasked investment bank Evercore Partners Inc with exploring whether a transaction can be put together, the sources had said, cautioning that a deal is far from certain.

A leveraged buyout of Walgreens would likely require participation of several private equity firms, each writing large checks, at a time when many of them have lost their appetite for teaming together on so-called club deals.