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: NewsContractsAsset SalesM&AMoversStefano PessinaWalgreens Boots Alliance Development GmbH
We simplify the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...