California Attorney General Rob Bonta has announced a settlement agreement with Walgreens Co. and its future owner, Sycamore Partners Management, L.P., to ensure continued pharmacy services across the state. The agreement comes after Walgreens disclosed in March 2025 that it would be acquired by Sycamore, a private equity firm. The deal involves more than 450 Walgreens stores in California and raised concerns about possible increases in pharmacy deserts, which could affect access for low-income individuals, elderly residents, rural communities, and people of color.
The settlement was negotiated under Assembly Bill 853 (AB 853), a law requiring notice and review by the Attorney General for transactions involving retail pharmacies and grocery stores to assess their impact on access to services and labor. AB 853 was authored by former Assemblymember Brian Maienschein and became effective on October 8, 2023.
Attorney General Bonta stated: “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. 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 currently the only national pharmacy chain not owned by one of the three major Pharmacy Benefit Managers (PBMs): CVS Caremark, Optum Rx, or Express Scripts. The acquisition covers locations in several major cities including Bakersfield, Fresno, Huntington Beach, Los Angeles, Modesto, Riverside, Sacramento, San Diego, San Francisco, San Jose, and Stockton.
Under the terms of the settlement—pending court approval—Walgreens and Sycamore have agreed to maintain all existing California Walgreens stores for at least seven years using best efforts. They must also provide advance notice before any store closure or sale; refrain from selling any stores to one of the Big Three PBMs; avoid financial actions that could weaken operations; continue participating in Medi-Cal and Medicare programs; offer financial assistance to patients; follow state staffing requirements; prioritize hiring laid-off workers at other locations; make required retirement contributions as per collective bargaining agreements; not contest unemployment claims without offering alternative employment nearby; negotiate with unions in good faith; and comply with nondiscrimination rules.
This marks Attorney General Bonta’s second settlement under AB 853—the first involved Rite Aid—and follows his recent action joining other attorneys general urging Congress to ban PBMs from owning or operating pharmacies. PBMs originally processed claims for drug companies but now hold significant market influence over drug pricing.
The California Department of Justice’s Healthcare Rights and Access Section continues efforts to monitor healthcare affordability and accessibility statewide through oversight of nonprofit healthcare transactions as well as consumer protection work related to consolidation in healthcare markets.
A copy of the settlement documents can be found here.
