VillageMD, which is majority owned by Walgreens Boots Alliance Inc., is exploring a deal to merge with Warburg Pincus-backed Summit Health, according to people familiar with the matter.
The acquisition by primary-care provider VillageMD of Summit, a health-care network and the parent of CityMD, would value the combined entity at between $5 billion to $10 billion, said the people, who asked to not be identified because the matter isn’t public.
An agreement could be reached in the coming weeks, though talks could still fall apart, the people added. Representatives for VillageMD, Walgreens and Warburg Pincus declined to comment, while Summit Health didn’t immediately respond to a request for comment.
The talks come as Walgreens rivals including CVS Health Corp. and Amazon.com Inc. push deeper into primary health care through major acquisitions. Walgreens agreed to more than double its stake last year in VillageMD to 63% from 30% by investing $5.2 billion in the company.
Under Chief Executive Officer Roz Brewer, Walgreens has been adding primary-care centers to its US retail locations, partnering with health insurers and buying out its remaining stakes in CareCentrix and Shields Health Solutions. In October, it appointed John Driscoll, CareCentrix’s CEO, as president of Walgreens’s US health-care unit. The company has also launched an initiative to enroll patients in clinical trials.
Walgreens first invested in closely held VillageMD in 2020 with a goal of building as many as 700 primary care clinics inside its pharmacies. It said last year it would increase the number to 1,000 by 2027.
The company also considered selling its Boots drugstore chain earlier this year to better focus on North America, but pulled the sale after failing to fetch a good price.
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