On March 6, 2025, Walgreens announced that it agreed to be acquired by private equity firm, Sycamore. The proposed transaction, which involves over 450 California Walgreens stores. Howevever a settlement was reached under Assembly Bill 853 (AB 853), which requires notice and review by the Attorney General of transactions involving retail pharmacies and grocery stores in order to assess impact on access and labor. AB 853 was authored by former Assemblymember Brian Maienschein (D-San Diego) and went into effect on October 8, 2023. The settlement is subject to court approval.

Walgreens is the last nationwide and statewide independent pharmacy chain – that is, a chain not owned by one of the Big Three Pharmacy Benefit Managers (PBMs), which are CVS Caremark, Optum Rx, and Express Scripts. The proposed transaction between Walgreens and Sycamore includes, but is not limited to, the following Walgreens stores in California: six in Bakersfield, 11 in Fresno, five in Huntington Beach, 13 in Los Angeles, eight in Modesto, five in Riverside, seven in Sacramento, seven in San Diego, 26 in San Francisco, 10 in San Jose, and seven in Stockton.

The California Attorney General announced a settlement with Walgreens Co. and its succeeding owner, Sycamore Partners Management, L.P. (Sycamore), that would operate as an injunction and protect competition, patients, and pharmacy-related workers.

Under the settlement, Walgreens and Sycamore agree to the following conditions for the next seven years:

– – Use best efforts to maintain all California Walgreens stores remaining as of the date of the agreement, as well as all required licenses.
– – Provide 90-day notice of sale or closure of any remaining Walgreens stores.
– – Prohibition from reselling any of the Walgreens stores in California to any of the Big Three PBMs.
– – Prohibition from using any dividend recapitalization or other distribution of profits where such a dividend recapitalization or other distribution of profits would reasonably be likely to materially impair the operations of Walgreens.
– – Use best efforts to continue participation in Medi-Cal and Medicare.
– – Use best efforts to provide financial assistance to patients.
– – Ensure best efforts regarding compliance with state staffing levels.
– – Maintain a hiring list for all employees from stores that close going forward for preferential hiring at other Walgreens stores.
– – Use commercially reasonable efforts to pay retirement contributions if collective bargaining agreements require such payments.
– – Use commercially reasonable efforts to abstain from contesting unemployment for individuals who are laid off as a result of the sale or closure of Walgreens stores if no nearby Walgreens store offers employment.
– – Use commercially reasonable efforts to bargain with any unions in good faith.
– – Comply with nondiscrimination rules in the provision of healthcare services.

This settlement is the second reached by the California Attorney General under AB 853. The first settlement was with Rite Aid and was announced on August 19, 2024. In addition, on April 14, 2025, the California Attorney General joined a bipartisan coalition of 39 attorneys general in urging the leaders of the U.S. House of Representatives and U.S. Senate to enact a law that prohibits PBMs, their parent companies, or affiliates from owning or operating pharmacies.

Created in the late 1960s to process claims for drug companies, PBMs were supposed to help consumers access low-cost pharmaceutical care through negotiated volume-pricing discounts, generic substitution, manufacturer rebates, and other tools. However, PBMs have overtaken the market and now wield outsized power to reap massive profits at the expense of consumers and local community pharmacies.