Walgreens has ended its takeover pursuit of rival Rite Aid following resistance from U.S. regulators and will instead now buy stores, distribution centers and inventory in a new deal.
The proposed merger, first announced in 2015, was initially for about $9.4 billion but was whittled down to about $6.8 billion earlier this year.
For scrapping the transaction, Walgreens Boots Alliance will pay Rite Aid Corp. a $325 million termination fee. It will pay Fred’s Pharmacy an additional $25 million following the termination of a related asset deal.
Under the new agreement, Walgreens will buy 2,186 stores, three distribution centers and related inventory from Rite Aid for approximately $5.18 billion in cash. Walgreens will also assume the related real estate leases and certain limited store-related liabilities. Rite Aid will have an option, exercisable through May 2019, to become a member of Walgreen’s group purchasing organization.
The Citizen:
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