The US owner of the Boots pharmacy chain is being acquired by private equity firm Sycamore Partners in a $10 billion (£7.8 billion) deal.

The price being paid for Walgreens Boots Alliance is significantly lower than the company's valuation a decade ago, reflecting its struggles with mounting debt and competition from online retailers offering cheaper products.

There have been reports that the Boots chain could be sold off separately by its new owner, Sycamore Partners.

Walgreens CEO Tim Wentworth stated that the firm has been navigating the challenges of a rapidly evolving pharmacy industry and an increasingly complex and competitive retail landscape. He mentioned that while progress is being made against their ambitious turnaround strategy, meaningful value creation will require time, focus, and changes that are better managed as a private company.

George Godber, fund manager at Polar Capital, told the BBC's Today programme that Boots has experienced frequent ownership changes and that its business model has faced difficulties. "People are buying more of those personal healthcare brands online than they are in the shop," he noted.

Catherine Shuttleworth, CEO of Savvy Marketing, said there would be considerable interest if the Boots business were put up for sale. She remarked that the company had turned itself around after a challenging period and remains an "unbelievably trusted brand" with a unique place in the UK psyche.

As of now, there are 1,900 Boots stores left in the UK following the pharmacy chain's closure of shops starting in June 2023 as part of a restructuring effort. Ms. Shuttleworth noted that reports of a potential sale would be concerning for staff, as uncertainty over ownership can be unsettling for employees.

Sycamore Partners is paying $11.45 per share for Walgreens Boots Alliance, which is higher than the current market value of its shares on the US stock exchange. Walgreens shares rose nearly 6% in extended trading in New York, although the company's stock market value has declined by approximately 80% over the past five years.

The acquisition is expected to be completed by the end of this year.

The Illinois-based Walgreens initially acquired a 45% stake in Boots in 2012 and bought the remaining shares two years later in a deal that valued Boots at around £9 billion. Walgreens' portfolio also includes its namesake US retail business, specialty pharmacy group Shields Health Solutions, and healthcare provider VillageMD.

In recent years, the company has faced increasing challenges as customers have turned to cheaper competitors. In 2022, Walgreens put Boots up for sale but later abandoned these plans, citing potential buyers' inability to raise sufficient funds.

In October, Walgreens announced plans to shut 1,200 stores in the US over the next three years as part of a cost-cutting program.