US: Walgreens just slashed its Rite Aid offer by $2 billion

Walgreens Boots Alliance and Rite Aid’s giant drugstore merger got smaller today after the companies said they would cut the value of the deal, may divest more stores to satisfy antitrust regulators and will extend the deadline by which the takeover will be completed.

Walgreens will now pay $6.50 to $7 a share for Rite Aid, the companies said today, giving the deal a value of $6.84 billion to $7.37 billion. That’s down from the $9 a share, or $9.4 billion, announced in 2015.

The exact price will depend on how many stores the companies have to divest, raising the ceiling to 1,200 stores, up from 1,000 when the deal was announced.

The announcement is the latest blow to the drug chains’ attempt to combine. The new agreement also includes a six-month extension to July 31, after the companies had already announced a previous extension.

Earlier this month, Bloomberg reported that Walgreens’s plan to win antitrust clearance for its acquisition of Rite Aid hadn’t satisfied FTC officials. The agency’s lawyers reviewing the deal weren’t sold on Walgreens’ plan to resolve competition concerns by selling stores to Fred’s, another retail chain, people familiar with the process said at the time.

Full Content: Fortune

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