The Long Saga Of Walgreens-Rite Aid Finds Closure With Amended Deal

After a long, unsuccessful struggle to merge, Walgreens Boots Alliance Inc WBA announced Tuesday that it secured regulatory clearance to purchase 1,932 stores, three distribution centers and associated inventory from Rite Aid Corporation RAD.

The new $4.375 billion transaction, amended from an earlier agreement of $5.175 billion for 2,186 stores, is expected to generate annual synergies over $300 million within four years.

“Combining Walgreens retail pharmacy network with a strong portfolio of Rite Aid locations is expected to help us achieve enhanced, sustainable growth while enabling us to broaden our reach and provide greater access to convenient, affordable care in more local neighborhoods across the United States,” Stefano Pessina, Walgreens executive vice chairman and CEO, said in a press release.

The terms include Walgreens’ seizure of real estate leases and the option for Rite Aid to join Walgreens Boots Alliance Development GmbH.

The boards of both parties have approved the deal, and Walgreens will begin purchasing assets in October. Individual stores, located primarily in the South and Northeast, will phase slowly into the Walgreens brand, while the distribution centers in Connecticut, Pennsylvania and South Carolina will transition no sooner than fall 2018.

Based on this timeline, Walgreens does not anticipate meaningful impact on earnings per share in the 2018 fiscal year.

At time of publication, shares of Rite Aid were down 5.49 percent at $2.58. Shares of Walgreens were down 1.71 percent at $81.19.

Related Links:

Fred's Is Big Loser In Rite Aid-Walgreens Deal

Rite Aid-Walgreens Deal Produces A Winner: Core-Mark Partisan Politics May Be To Blame For Hold Up In Walgreens-Rite Aid Deal __________ Image Credit: By ProducerMatthew - Own work, CC BY-SA 3.0, via Wikimedia Commons

Posted In: Stefano PessinaWalgreens Boots Alliance Development GmbHNewsContractsAsset SalesM&AMovers

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.