Walgreens Is Slowing Down M&A. Should Investors Be Worried?

Walgreens Boots Alliance (NASDAQ: WBA) is going to scale back on mergers and acquisitions. The company's pivot to healthcare and launching primary-care clinics has been taking

up a significant portion of its resources and attention, and that's where its focus will remain. Is this good news for investors, or could it be a sign of trouble ahead for

the stock? Not ruling out all acquisitions, just large ones On Walgreens' first-quarter earnings call earlier this month, Chief Financial Officer James Kehoe said that

while the company won't be pursuing multibillion-dollar acquisitions in the near term, it could acquire businesses that are "in the hundreds of millions." The focus will be on

"smaller companies with specific, call it, capabilities that we need to advance our organic business." The company's recent investing activities have been related to its

healthcare business. Last September, Walgreens announced it would buy out the remaining 30% stake and take full ownership in Shields Health Solutions, a specialty pharmacy

business, for $1.37 billion. It also entered into an agreement in October 2022 to fully acquire home health company CareCentrix by spending $392 million to obtain the remaining

45% stake in the business. Meanwhile, it has also been spending billions more on investing in primary-care company VillageMD, which recently announced plans to acquire

urgent-care provider Summit Health-CityMD. On top of the $5.2 billion that Walgreens invested in VillageMD in 2021 to launch primary-care clinics at its locations, the pharmacy

retailer has also put in an additional $3.5 billion to help fund the Summit Health-CityMD acquisition.