06.29.17
There’s been a change of plans at Walgreens Boots Alliance. Originally, the leading pharmacy chain was going to acquire its rival, Rite Aid, as reported in Happi, for $17.2 billion. Now, the company will instead buy nearly half of its stores.
The new definitive agreement with Rite Aid Corporation states that Walgreens Boots Alliance will purchase 2,186 stores, three distribution centers and related inventory from Rite Aid. The consideration for the transaction will be $5.175 billion in cash, the assumption by Walgreens Boots Alliance of the related real estate leases and the grant of an option to Rite Aid, exercisable through May 2019 and subject to certain conditions, to become a member of Walgreens Boots Alliance’s group purchasing organization, Walgreens Boots Alliance Development GmbH. Walgreens Boots Alliance will also assume certain limited store-related liabilities as part of the new transaction.
This new agreement replaces the previous merger agreement with Rite Aid, announced in October 2015 and amended in January 2017, and the agreement to divest certain Rite Aid stores to Fred’s, Inc. announced in December 2016. Both of these agreements have been terminated. The new transaction is subject to the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions. The initial closing of the new transaction is expected to occur within the next six months.
Walgreens Boots Alliance, Inc. posted financial results for the third quarter of fiscal 2017, which ended May 31, 2017. Sales rose 2.1% to $30.1 billion. However, sales decreased 0.7% to $88.1 billion in the first nine months of fiscal 2017.
Walgreens Executive Vice Chairman and CEO Stefano Pessina said, “Our results this quarter continued to meet our expectations as strategic partnerships brought more patients to our US pharmacies. This led to our highest reported quarterly retail prescription market share in the US. Our ongoing cost transformation program continues to bear fruit and we remain confident in the long term growth of our company.”
The new definitive agreement with Rite Aid Corporation states that Walgreens Boots Alliance will purchase 2,186 stores, three distribution centers and related inventory from Rite Aid. The consideration for the transaction will be $5.175 billion in cash, the assumption by Walgreens Boots Alliance of the related real estate leases and the grant of an option to Rite Aid, exercisable through May 2019 and subject to certain conditions, to become a member of Walgreens Boots Alliance’s group purchasing organization, Walgreens Boots Alliance Development GmbH. Walgreens Boots Alliance will also assume certain limited store-related liabilities as part of the new transaction.
This new agreement replaces the previous merger agreement with Rite Aid, announced in October 2015 and amended in January 2017, and the agreement to divest certain Rite Aid stores to Fred’s, Inc. announced in December 2016. Both of these agreements have been terminated. The new transaction is subject to the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions. The initial closing of the new transaction is expected to occur within the next six months.
Walgreens Boots Alliance, Inc. posted financial results for the third quarter of fiscal 2017, which ended May 31, 2017. Sales rose 2.1% to $30.1 billion. However, sales decreased 0.7% to $88.1 billion in the first nine months of fiscal 2017.
Walgreens Executive Vice Chairman and CEO Stefano Pessina said, “Our results this quarter continued to meet our expectations as strategic partnerships brought more patients to our US pharmacies. This led to our highest reported quarterly retail prescription market share in the US. Our ongoing cost transformation program continues to bear fruit and we remain confident in the long term growth of our company.”