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Walgreens is America's largest drugstore chain by revenues, and also now the leader by store outlets, as a result of a series of regional acquisitions, including the famous Duane Reade drugstore chain in New York, added in 2010. (Competitor CVS Health is bigger by total revenues because of its large pharmacy benefits management division). Walgreens has come to position itself as the "front line" for the delivery of healthcare services in the US, with an expanding networking of in-pharmacy and worksite healthcare clinics, offering diagnosis and treatment for minor ailments. However it also sells a broad range of non-healthcare products, giving it a growing presence in the convenience store segment. In 2012, the group made a big jump into Europe, agreeing to acquire an initial 45% stake in local retailer and wholesaler Alliance Boots. It bought out the remaining shares slightly earlier than expected, at the very end of 2014. Boots also contributed a collection of highly regarded private label health and beauty products including No 7, Soap & Glory, Liz Earle and Botanics, now sold globally. A year later, the group unveiled a $17.2bn bid for US rival Rite Aid. However, that outright acquisition was abandoned 18 months later after protracted and fruitless negotiations with regulators. Instead, Walgreens bought out a large number of the rival chain's stores, lifting its own footprint to around 8,970 stores across the US and in Puerto Rico. In 2018 the group secured its relationship with US wholesaler AmerisourceBergen by acquiring what is now a 29% stake in that business, and in 2021, it spun off most of its existing Alliance Wholesale network in Europe into that partner. In 2020, the group agreed a partnership with VillageMD to open between 500 and 700 Village Medical primary care clinics in US Walgreens stores. It has another 4,030 stores internationally, mostly under the Boots banner. Combined revenues for the year to Aug 2020 hit a new high of $139.5bn before slipping back in ye 2021 to $132.5bn. Net income was $2.5bn. US pharmacy retail - the Walgreens and Duane Reade business - accounted for $112bn, compared to just $10bn from Boots pharmacies in the UK and elsewhere and $10.5bn from wholesale. The acquisition of the much smaller Boots Alliance has proved a spectacular victory for that company's former controlling shareholder Stefano Pessina, who rose to CEO of the merged company, as well as its largest shareholder with a 16% stake. He brought with him most of his management team, who took over many of the group's senior roles. In late 2019, the group was revealed to have held talks with investment firm KKR to go private in what would be the largest ever leveraged buyout if it goes ahead. No such deal has yet materialised. However, new rumours emerged in 2021 that the group was considering a spin-off of the international Boots business. Stefano Pessina passed on the role of CEO in 2021 to Roz Brewer but remains executive chairman. John Standley is EVP & president, Walgreens.
Capsule checked 21st July 2021
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Historical profile information for Walgreens Boots Alliance
Marketer Moves 4th May 2022: New CMO appointed at Walgreens. See Marketer Moves (members only).
Marketer Moves 20th Jan 2022: New CMO TBC at Walgreens. See Marketer Moves (members only).
Adbrands Daily Update 15th Oct 2021: Walgreens Boots agreed to acquire majority control of VillageMD, which runs a network of medical clinics and doctor's offices in the US. WBA acquired 30% of the business last year for $1bn, and will now lift its stake to 63% for a further $5.2bn. It plans to open clinics in at least 600 of its drugstore locations by 2025, and in a further 400 by 2027. At the same time, Walgreens is buying health benefits manager CareCentrix. Both deals will accelerate the group's evolution from a pharmacy operator into a fully fledged healthcare provider.
Adbrands Daily Update 27th Jan 2021: Walgreens Boots announced Roz Brewer, currently COO of Starbucks, as its next CEO. She will join the group in March to take the reins from Stefano Pessina, who will remain executive chairman for an additional period. Brewer is also currently a board director of Amazon - now emerging as a serious rival to Walgreens - but she will resign that position before she joins the pharmacy giant. Though she has spent much of her career in retail, Brewer is originally a scientist by training. She will also be the only African-American woman running a Fortune 500 company.
Adbrands Daily Update 6th Jan 2021: Walgreens Boots announced plans to sharpen its focus on its retail operations by selling control of wholesale division Alliance to US distribution giant AmerisourceBergen. The deal price is $6.5bn. Almost all of it will be paid in cash, but Amerisource will also part with around $225m of stock, lifting Walgreens Boots' existing stake to just over 30%. The two companies agreed to extend their existing distribution partnership. Amerisource will continue to supply Walgreens in the US until at least 2029, while Alliance will remain the local partner for Boots in Europe until at least 2031.
Adbrands Daily Update 28th Jul 2020: Stefano Pessina said he will step down as CEO of Walgreens Boots Alliance as soon as a successor can be selected. However the 79-year-old, who is also the company's largest shareholder, will assume instead the role of executive chairman, taking over that position from James Skinner. The latter will remain a member of the WBA board.
Adbrands Daily Update 9th Jul 2020: Walgreens announced plans to roll out a national chain of full-service physician-led medical clinics in a joint venture with healthcare provider VillageMD. Up to 700 primary care clinics are planned by 2025, operating under the banner of Village Medical at Walgreens. More than half will be located in areas which are currently acknowledged by the US Dept of Health & Human Services to be medically under-served. "These clinics at our conveniently located stores are a significant step forward in creating the pharmacy of the future," said WBA CEO Staefano Pessina, "meeting many essential health needs all under one roof as well as through other channels."
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