Walgreens Boots Alliance calls off Rite Aid deal

By Lucy Tandon Copp 29-Jun-2017

After struggling to close the previously announced acquisition of Rite Aid shares and divestiture with Fred’s, Walgreens now plans to buy stores and distribution centres

Walgreens Boots Alliance has called time on its deal to acquire the outstanding common stock shares of rival pharmacy retail chain Rite Aid.

Instead, the companies have now agreed a new agreement, which will see Walgreens acquire 2,186 stores, three distribution centres and related inventory from Rite Aid for $5.175bn in cash.

Speaking of the decision, Walgreens Boots Alliance Executive Vice Chairman and CEO Stefano Pessina said: “This new transaction extends our growth strategy and offers additional operational and financial benefits.

“It will allow us to expand and optimize our retail pharmacy network in key markets in the U.S., including the Northeast, and provide customers and patients with greater access to convenient, affordable care.

“We believe this new transaction addresses competitive concerns previously raised with respect to the prior transaction and will streamline and simplify the transition for customers, team members and other stakeholders.”

The deal replaces the previous merger, which was originally due to close in October 2016, but was later pushed back to January.

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At the start of the year, however, the deal was postponed again to July in order to give both companies the chance to obtain regulatory approval.