Under settlement, new owner — Sycamore Partners Management, L.P. — must use best efforts to continue operating Walgreens stores throughout California, including Bakersfield, Fresno, Huntington Beach, Los Angeles, Modesto, Riverside, Sacramento, San Diego, San Francisco, San Jose, and Stockton 

August 29, 2025 - OAKLAND — On Thursday, California Attorney General Rob Bonta announced a settlement with Walgreens Co. (Walgreens) and its succeeding owner, Sycamore Partners Management, L.P. (Sycamore), that would operate as an injunction and protect competition, patients, and pharmacy-related workers. Earlier this year, 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, has the potential to increase pharmacy deserts in California — with disproportionate impacts on workers and patients of Walgreens. Walgreens patients include low-income individuals, elderly individuals, individuals who live in rural areas, and people of color. The 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.

“The settlement we have reached with Walgreens and Sycamore is good news for Californians. At its core, it ensures that the California Walgreens stores remain open and continue providing vital services in our communities,” said Attorney General Bonta. “Across the country, pharmacies are closing in alarming numbers. Thanks to AB 853, my office has the power to address the competition harms posed by transactions involving retail pharmacies and grocery stores, and we are not letting that authority go unused.”

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.

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.

Today’s settlement is the second reached by Attorney General Bonta under AB 853. The first settlement was with Rite Aid and was announced by Attorney General Bonta on August 19, 2024. In addition, on April 14, 2025, Attorney General Bonta 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.

The California Department of Justice’s Healthcare Rights and Access Section (HRA) works proactively to increase and protect the affordability, accessibility, and quality of healthcare in California. HRA’s attorneys monitor and contribute to various areas of the Attorney General’s healthcare work, including nonprofit healthcare transactions; consumer rights; anticompetitive consolidation in the healthcare market; anticompetitive drug pricing; privacy issues; civil rights, such as reproductive rights and LGBTQ+ healthcare-related rights; and public health work on tobacco, e-cigarettes, and other products. 

A copy of the settlement documents can be found here.

Source: CA. DOJ