Walgreens is surging on a report that KKR formally approached the company to talk about taking it private

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• Private equity firm KKR has reportedly approached Walgreens about a buyout deal, according to Bloomberg.
• Shares of Walgreens gained as much as 7.7% in early trading Monday on the news.
• It is unclear if the talks will lead to a deal. A buyout of Walgreens, which is worth about $56 billion and has $16.8 billion in debt, would be the largest-ever leveraged buyout.
• Watch Walgreens trade live on Markets Insider.

Shares of Walgreens Boots Alliance gained as much as 7.7% in early trading Monday after Bloomberg reported that KKR, a private equity firm, formally approached the drugstore about a deal that could be the largest-ever leveraged buyout.

A spokesperson for Walgreens declined to comment.

KKR has been working on a proposal to take Walgreens private, and is one of a group of private equity firms that's had informal talks with the drugstore, Bloomberg reported last week.

It's unclear that the talks will lead to anything, according to Bloomberg, as Walgreens or KKR could decide not to go forward with any deal. Analysts who cover Walgreens are skeptical that any deal will take place, Barron's reported last week.

Taking Walgreens private would be a massive undertaking, as the company has a market value of about $56 billion and carries $16.8 billion of debt, according to Bloomberg data. Walgreens CEO Stefano Pessina holds a 16% stake in the company, Bloomberg reported.

A buyout of that size would be the largest in history, taking the top spot from KKR and TPG's 2007 takeover of Texas power company TXU Corp., according to Reuters. That deal cost about $45 billion including debt, Bloomberg reported.

Going private would help Walgreens, which has struggled to adapt to an ever-changing retail landscape. Recently, the company has been partnering with tech giants like Microsoft and Alphabet to expand its offerings and compete with Amazon.

Still, the stock has fallen more than 20% in the last 12 months as Walgreens' partnerships pale in comparison to drastic moves competitors such as Walmart, CVS, and Amazon have made to add healthcare to their businesses, Business Insider's Lydia Ramsey reported.

Walgreens is down more than 8% year to date.

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