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Bloomberg reports that private equity group KKR has formally approached Walgreens Boots Alliance Inc. about a possible takeover of the chain drug retailing giant.

The cost of taking the company private has not been disclosed, but it is known that Walgreens Boots has a market value of about $56 billion and $16.8 billion of debt. A leveraged buyout almost certainly would be the largest in history.

It is far from being a done deal. Bloomberg writes that it is "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 Bloomberg story says that "Walgreens Boots, led by Chief Executive Officer Stefano Pessina, has been reviewing a potential deal with a financial adviser to take the company private amid buyout interest … Some buyout firms looked but decided against pursuing such a big deal."

The story says there is no firm timetable for any sort of agreement.
KC's View:
While the Bloomberg story suggests that "a buyout would give Walgreens Boots time to adapt to a fast-changing retail landscape, free from the quarter-by-quarter demands of public shareholders," but there is also the other possibility - which is that the company will be so laden with debt that it won't have the resources to make the investments that competitors like CVS, Walmart and Amazon are making. They'll be trying to reinvent health care, and Walgreen will be trying to cover its debt and vigorish.