☕ What Walgreens sale means for you

Good morning!

It didn’t take long for Canada’s new Prime Minister to send a layered insult across the border. When asked to respond to President Trump’s hovering threat of tariffs on our northern neighbor, Mark Carney responded: “In trade as in hockey, Canada will win”. Ouch.

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Some headlines from this morning:

• A US envoy will travel to Doha, Qatar tomorrow to participate in negotiations for the second phase of a ceasefire between Israel and Hamas. The talks, which began today, mark the first formal discussions since the 42-day Phase One ceasefire ended a week ago. Steve Witkoff, President Trump’s envoy to the Middle East, will push for a deal that aligns with US objectives, including the release of 145 remaining hostages and extending the current ceasefire until after the Ramadan and Passover festivals. Last week, the US held one-on-one talks with Hamas regarding the release of US citizens who are amongst the hostages.

• Over 1,300 people have been killed in Syria since Thursday in escalating violence between pro-government and opposition groups, marking the deadliest violence since the end of the Assad family's rule in December. The clashes, involving Assad loyalists and Hayat Tahrir al-Sham (HTS) security forces, escalated into revenge killings of civilians in the northwest of the country. Interim President Ahmed Al-Sharaa has urgently called for peace, but the violence raises doubts about his ability to unite Syria’s fractured political and religious groups into a stable coalition.

• Authorities have ruled actor Gene Hackman died of heart disease up to a full week after his wife, Betsy Arakawa, was likely killed by Hantavirus, a rare but often deadly rodent borne disease which attacks the respiratory system. Autopsies of both Hackman and his wife clarified the mysterious deaths of the pair who had died many days before being discovered. Chief medical investigator Heather Jarrell said Hackman was suffering from “advanced” Alzheimer’s disease, and “it was possible he was not aware” of his wife’s death.

• A “broad population” of the 80,000 US Health and Human Services Department employees have been offered $25,000 for their voluntary resignation. The HHS is part responsible for America’s health, including the administration of Medicare and Medicaid, and is one of the largest departments and employers in the government. The price tag has now made it a target for the Trump administration’s government cost cutting efforts, with this move coming just one day before the Trump administration asked government department bosses to present a plan which significantly reduces staff.

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Former central bank Governor Mark Carney is Canada’s new Prime Minister, replacing the outgoing leader Justin Trudeau.

He won a competitive ballot for the leadership of the Liberal Party.

While Carney is not an elected politician, the party’s rules allow for non-sitting MPs to run for leadership roles.

The leadership ballot came after Trudeau stepped down amid “internal battles” in his party.

Who is Mark Carney and how did he become PM?

Carney spent 13 years working at the investment bank Goldman Sachs.

He then went on to serve as the Governor of the Bank of Canada between 2008 and 2013, and also the Bank of England between 2013-2020.

The 59-year-old was appointed a special economic adviser to Trudeau last year.

During the leadership race, Carney focused on his economic credentials to handle cost of living issues and global challenges.

What is next for Carney?

Canada needs to hold an election by October. Polling on the governing Liberal Party has consistently shown a downturn in public support.

However, the party has recovered in recent weeks as Canada pushes back against President Trump’s tariffs.

In his victory speech at the Liberal Party convention, Carney said: “My government will keep the [counter-tarrifs] on until the Americans show us respect.”

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Major retailer Walgreens Boots Alliance announced on Thursday that private equity firm Sycamor Partners would purchase the company, meaning it will have a private owner for the first time since 1927.

The deal, including debt, is for nearly $24 billion. That’s a lot of money - but a sharp drop from its highs over the past two decades.

Why has Walgreens value been decreasing?

In the last three years, Walgreens stock has dropped 70%.

This is because Walgreens is struggling on two main fronts - reduced reimbursements for filling prescriptions and competition from major online retailers like Amazon.

Reimbursement rates for buying and dispensing prescription drugs have dropped, partly because the current supply chain process employs powerful middlemen called ‘pharmacy benefit managers’ to negotiate drug prices with manufacturers and distribute reimbursements. Pharmacies say these middlemen are too powerful, and the discounts they now secure on the cost of drugs for themselves eat away at retailer’s profit margins.

Non-drug related sales in drug stores have also fallen as inflationary wary customers turn to cheaper options like Target.

Late last year, Walgreens announced they would close 1,200 stores across the country, and attempted to sell major UK pharmacy Brand ‘Boots’ which they fully acquired in 2014.

What is going private, and how will this help?

"Going private" is when a public company is taken over by private investors, removing it from the stock market. This gives the new owners of the company more control and less public scrutiny.

Walgreens management has indicated that to save their company they need to make decisions without worrying about their investors' reactions.

Their CEO said “while we are making progress against our ambitious turnaround strategy, meaningful value creation will take time, focus and change that is better managed as a private company.”

Should I still shop at Walgreens?

The effect on Walgreens shoppers of this private buyout won’t be known until the recovery strategy employed by Sycamor partners is revealed (if it ever becomes public at all).

Generally, after a private buy-out, prices could fluctuate in either direction, more stores could be closed, or the product range might change.