Sponsored by VMG Health | info@vmghealth.com | 214.369.4888

FTC clears $4.38B Walgreens, Rite Aid deal

The Federal Trade Commission approved the amended merger agreement between Deerfield, Ill.-based Walgreens Boots Alliance and Camp Hill, Pa.-based Rite Aid Sept. 19 after nearly two years of negotiations.

Under the amended agreement, Walgreens will purchase 1,932 Rite Aid stores, three distribution centers and related inventory for $4.38 billion in cash. While the boards of directors of both organizations approved the deal, it is still subject to customary closing conditions.

Walgreens officials expect to begin purchasing the stores in October and to complete the acquisition in spring 2018. The stores, located primarily in the Northeast and southern U.S., will transition to the Walgreens brand once the merger is complete. The distribution centers will not begin transitioning to the Walgreens brand for at least 12 months, Walgreens officials said.

Officials also said the deal will not have a "significant impact" on Walgreens' adjusted diluted net earnings per share for its fiscal year ending Aug. 31, 2018.

The amended agreement replaces the organizations' earlier purchase agreement crafted in June. Under the previous agreement, Walgreens planned to purchase 2,186 Rite Aid stores and related assets for $5.18 billion in cash.

"This is a significant moment for our company and we are excited about the opportunities this agreement will deliver for our customers and patients, employees and investors,” said Walgreens Boots Alliance Executive Vice Chairman and CEO Stefano Pessina. "We are confident in the path ahead and look forward to working together to shape the future of healthcare and deliver on the full potential these stores bring to our network."

 

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.