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Stefano Pessina, executive chair of the Walgreens Boots Alliance, will almost double its stake in the US Pharmacy Group as part of its acquisition by private equity group Sycamore, according to people familiar with the issue.
Sycamore agreed earlier this month to make Walgreens private with transactions worth up to $23.7 billion.
Walgreens’ biggest shareholder, Pessina will acquire about 17% stake in the company that backed Forge through the 2014 merger of US-based Walgreens and Alliance Boots, and inject cash as part of the transaction.
His stock in the business shows the extent to which Pessina, formerly chief executive of Walgreens, deepens his involvement with the group ahead of the possibility of a breakup. His current interest in the listed groups is worth as much as $2.1 billion.
The complex debt funds involved in the transaction give Sycamore the flexibility to split Walgreens, Boots, Specialty Pharma Unit Health Solutions, and Primary Care Business Villagemd into independent businesses.
It was able to tee back to the possibility of selling boots. This follows previous failed efforts to sell chains that have existed on the UK High Street for almost two centuries.
Pessina has proven to be an irrepressible deal maker since she took over the family pharma wholesaler in Italy in 1977.
Through a series of transactions leading up to the merger with Boots in 2006, he built the European Drug Wholesalers Alliance Unicheme with Ornerabara, a spouse and business partner who oversees Walgreens’ business outside the US.
Pessina and private equity firm KKR made alliance boots private a year later at Europe’s biggest buyout. The Walgreens then eventually took over it in 2014. Pessina led the total group from 2015 to 2021.
Walgreens’ market value reached more than $100 billion shortly after the merger in 2014, but fell below the next $1 billion as it navigated various challenges, including the rise of e-commerce competitors. The agreement with Sycamore will give the group a share value of approximately $10 billion.
Pessina was at the heart of the takeover talks as she was trying to find a solution to the group’s swooping stock price, said those familiar with the issue.
Walgreens announced that Pessina will invest cash in the transactions and maintain a significant fairness for the company, but did not identify how many new entities he owns. Walgreens is in the middle of a 35-day period to entertain and seek rival bids.
Pessina and Sycamore declined to comment. Walgreens did not immediately respond to requests for comment.
Additional Reports by Amelia Pollard
