Walgreens to Sell Stake in Cencora for $1.1 Billion
- Walgreens plans to sell another slice of its stake in Cencora for $1.1 billion.
- The struggling drugstore chain will receive about $1.1 billion from the sale.
- This move reflects Walgreens' efforts to generate capital and streamline its operations.
Walgreens Boots Alliance Inc. has announced the sale of a portion of its stake in drug distributor Cencora for approximately $1.1 billion. The company plans to utilize the proceeds primarily to reduce its debt and for general corporate purposes. This transaction decreases Walgreens' ownership in Cencora from 12% to about 10%, following a previous sale in May that reduced its stake from 13% for $400 million. The Deerfield, Illinois-based drugstore chain is currently facing significant challenges, including tight reimbursement rates for prescriptions and rising operational costs. In response to these difficulties, Walgreens' leadership revealed plans in late June to revamp its U.S. business, which may involve closing hundreds of underperforming stores over the next few years. Additionally, the company is stepping back from its initiative to establish primary care clinics adjacent to some of its locations. As part of its strategy to improve cash flow, Walgreens began 2024 by cutting its dividend to shareholders. The company reported disappointing quarterly results at the end of June, missing analyst earnings expectations and subsequently lowering its fiscal year forecast. This year has been particularly tough for Walgreens, with its shares plummeting over 50%, contrasting sharply with gains in broader market indexes. In premarket trading, Walgreens shares dipped slightly to $11.72, while Cencora's shares fell by 1.3% to $241.24.