US: FTC clears Walgreens-Rite Aid ‘light’ deal

In its fourth attempt, Walgreens Boots Alliance clinched regulatory approval for a deal to buy Rite Aid stores after a last-minute reduction of the number of stores and price.

The Deerfield-based drugstore chain said Tuesday it secured clearance for a revised deal under which it will buy 1,932 Rite Aid stores for US$4.38 billion. That’s about 250 fewer stores than under a previous proposal, which totaled US$5.18 billion.

The deal, once completed, will be a hard-won victory for Walgreens Chief Executive Officer Stefano Pessina, who has pushed for a transaction that could clear regulatory approval since the fall of 2015. The modified agreement, while reduced, will still enable Walgreens to dramatically expand its footprint and become a more powerful competitor for CVS Health. With the addition of the Rite Aid stores, Walgreens will have about 10,000 locations in the US.

Store purchases are expected to begin in October and be completed in the spring of 2018, Walgreens said. Most of them are in the northeast and southern U.S., the company said.

Walgreens initially proposed a takeover of Rite Aid in October 2015 for US$9 a share, or US$9.4 billion. That deal ran into roadblocks at the Federal Trade Commission, and in January of this year Walgreens and Rite Aid recut the deal in an attempt to resolve the agency’s concerns that the combination would hurt competition.

Full Content: Yahoo

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