It’s Official: Walgreens to Buy Rite Aid
Walgreens and Rite Aid are ready to unite.
UPDATE: Oct. 28, 7:30 a.m. It’s official, Walgreens has agreed to buy Rite Aid for $9 per share. The total enterprise value of the deal is $17.2 billion. That’s a 48 percent premium over the Oct. 26 closing price per share.
If approved by government regulators, the combined company will have the most stores of any American pharmacy (13,000) and put CVS into second-place with 7,800.
Walgreens Boots Alliance Executive Vice Chairman and CEO Stefano Pessina:
“Today’s announcement is another step in Walgreens Boots Alliance’s global development and continues our profitable growth strategy. In both mature and newer markets across the world, our approach is to advance and broaden the delivery of retail health, wellbeing and beauty products and services. This combination will further strengthen our commitment to making quality healthcare accessible to more customers and patients. Our complementary retail pharmacy footprints in the U.S. will create an even better network, with more health and wellness solutions available in stores and online. Walgreens Boots Alliance will provide to Rite Aid its global expertise and resources to accelerate the delivery of integrated frontline care, and to offer innovative solutions for providers, payers and other entities in the U.S. healthcare system. Finally, this combination will generate a stronger base for sustainable growth and investment into Rite Aid stores, while realizing synergies over time.”
Rite Aid Chairman and CEO John Standley:
“Joining together with Walgreens Boots Alliance will enhance our ability to meet the health and wellness needs of Rite Aid’s customers while also delivering significant value to our shareholders. This transaction is a testament to the hard work of all our associates to deliver a higher level of care to the patients and communities we serve. Together with Walgreens Boots Alliance, the Rite Aid team can continue to build upon this great work through access to increased capital that will enhance our store base and expand opportunities as part of the first global pharmacy-led, health and wellbeing enterprise.”
ORIGINAL: The Wall Street Journal is reporting that Walgreens is nearing a potential $10 billion deal to buy Rite Aid — uniting two of the largest drug store chains operating in the Philadelphia region. Nationally, they are the second- and third-largest behind CVS.
Citing people familiar with the matter, the WSJ says a deal is expected to be announced Wednesday.
“Rite Aid shares surged 38 percent to $8.38 after The Wall Street Journal reported the talks, while Walgreens rose 5 percent to $93.95,” the WSJ says.
Will a deal of this magnitude actually get past federal regulators?
“Given their sizes, the deal would be expected to draw scrutiny from antitrust regulators, and big store and other divestitures could be required to win their blessing. Both companies have big store counts in states like California, New York and Massachusetts, while in others like Florida, Texas and Illinois, there is no overlap,” the WSJ says.
