Walgreen Boots Alliance has secured regulatory clearance to buy 1932 Rite Aid stores, along with three distribution centers and related inventory from Rite Aid Corporation.
The transaction is valued at US$4.375 billion in cash and other considerations.
The new sale agreement follows regulatory concerns over the original deal announced in June which would have seen the entire Rite Aid operation swallowed up by Walgreen Boots Alliance.
The transaction has been approved by the boards of directors of Rite Aid and Walgreens Boots Alliance and is still subject to other customary closing conditions. Store purchases are expected to begin in October, with completion anticipated in spring 2018.
Meanwhile, Rite Aid will have an option to become a member of Walgreens Boots Alliance’s group purchasing organisation.
“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. “Combining Walgreens retail pharmacy network with a strong portfolio of Rite Aid locations is expected to help us achieve enhanced, sustainable growth while enabling us to broaden our reach and provide greater access to convenient, affordable care in more local neighborhoods across the US. We are confident in the path ahead and look forward to working together to shape the future of health care and deliver on the full potential these stores bring to our network,” he said.
After all stores are acquired, they will be progressively converted to Walgreens branding. The stores to be purchased are located primarily in the Northeast and Southern US, and the three distribution centers to be purchased are located in Dayville, Connecticut, Philadelphia and Spartanburg, South Carolina. The transition of these distribution centers to Walgreens will not begin for at least 12 months.
Parties to the deal have not commented on the future of the remaining 254 Rite Aid stores included in the original agreement.