SEC Form 8-K filed by Walgreens Boots Alliance Inc.
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Item 8.01. Other Events.
As initially disclosed in the Quarterly Report on Form 10-Q of Walgreens Boots Alliance, Inc. (together with Walgreen Co., the “Company”) for the quarterly period ended February 28, 2025, the Company filed suit in federal court in the Eastern District of Texas against the Department of Justice, (the “DOJ”) and the U.S. Drug Enforcement Administration (the “DEA”) on January 16, 2025, seeking declaratory judgement and other relief in connection with the DEA’s attempt to enforce certain purported rules related to the dispensing of opioids and other controlled substances that had never undergone requisite notice-and-comment rulemaking. Shortly thereafter, also on January 16, 2025, the DOJ, filed suit in federal court in the Northern District of Illinois, alleging that the Company violated the Controlled Substance Act, the False Claims Act, and other state and federal laws, seeking monetary relief (including treble damages), civil penalties and injunctive relief.
On April 18, 2025, the Company entered into a settlement agreement with the DOJ, pursuant to which the parties agreed to resolve all claims related to the DOJ and DEA actions (the “Settlement Agreement”). Under the terms of the Settlement Agreement, the Company will pay $300 million plus interest (accruing at an annual rate of 4.0%), to be paid over a six-year period (the “Settlement Term”). The Settlement Agreement requires the Company to pay $20.0 million plus interest within 21 days of the execution of the Settlement Agreement.
Pursuant to the Settlement Agreement, the Company may be required to pay up to an additional $50 million if the Company meets certain specific future free cash flow targets over the Settlement Term (the “Contingency Payment”). Under the terms of the Settlement Agreement, the Contingency Payment will be triggered and become immediately payable upon any sale, merger or transfer of the Company or a significant portion of the assets of the Company to any third party during the Settlement Term, including the previously announced transaction with affiliates of Sycamore Partners, L.P.
Pursuant to the Settlement Agreement, the parties will file dismissals with both courts, dismissing all claims against the Company and the DEA. The Company entered into the Settlement Agreement to resolve the last anticipated major opioid regulatory matter and to avoid the cost and uncertainty of continued litigation. The Settlement Agreement includes no admission of wrongdoing or liability by the Company.
Cautionary Note Regarding Forward-Looking Statements
All statements in this report that are not historical including, without limitation, those regarding the Company’s views with regard to the Settlement Agreement and the outcome of such litigation, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “expect,” “will,” “likely,” “intend,” “plan,” “aim,” “continue,” “believe,” “seek,” “anticipate,” “upcoming,” “may,” “possible,” “could,” and variations of such words and similar expressions are intended to identify such forward-looking statements.
These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions, known or unknown, that could cause actual results to vary materially from those indicated or anticipated. These risks, assumptions and uncertainties include those described in Item 1A (Risk Factors) of our Annual Report on Form 10-K for the fiscal year ended August 31, 2024, in Item 1A (Risk Factors) in our Quarterly Reports on Form 10-Q and in other documents that we file or furnish with the Securities and Exchange Commission. If one or more of these risks or uncertainties materializes, or if underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. All forward-looking statements we make or that are made on our behalf are qualified by these cautionary statements. Accordingly, you should not place undue reliance on these forward-looking statements, which speak only as of the date they are made.
We do not undertake, and expressly disclaim, any duty or obligation to update publicly any forward-looking statement after the date of this release, whether as a result of new information, future events, changes in assumptions or otherwise.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: April 18, 2025 | WALGREENS BOOTS ALLIANCE, INC. | |||||
| By: | /s/ Lanesha Minnix | |||||
| Name: | Lanesha Minnix | |||||
| Title: | Executive Vice President and Global Chief Legal Officer | |||||
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