Walgreens Boots, Rite Aid sell 865 Rite Aid stores to Fred'sStaff Writer | December 20, 2016
Walgreens Boots Alliance and Rite Aid Corporation have entered into an agreement to sell 865 Rite Aid stores and certain assets related to store operations to Fred’s.
Acquisition $950 million in an all-cash transaction
The agreement is being entered into to respond to concerns identified by the FTC in its review of the proposed acquisition of Rite Aid by Walgreens Boots Alliance, which was announced in October 2015.
Walgreens Boots Alliance is actively engaged in discussions with the FTC regarding the transaction and is working toward a close of the Rite Aid acquisition in early calendar 2017.
The proposed divestiture transaction, if approved, would establish Fred’s Pharmacy as one of the largest drugstore chains in the United States with significant presence in areas such as the South and on the East and West Coasts.
Specific locations of the stores to be divested will be announced upon FTC approval of the Walgreens Boots Alliance and Rite Aid merger.
Fred’s Pharmacy would acquire 865 Rite Aid stores and certain assets related to store operations, and expects to continue to employ all store associates and certain field and regional associates related to the operations of the acquired stores upon completion of the divestiture.
Fred’s Pharmacy would continue to operate the acquired stores under the Rite Aid banner during a transition period.
If the FTC requires divestiture of more than the 865 Rite Aid stores currently contemplated by the purchase agreement and Walgreens Boots Alliance agrees to sell such stores, the purchase agreement requires Fred’s to purchase such additional stores.
Walgreens Boots Alliance continues to expect that it will realize synergies from the acquisition of Rite Aid in excess of $1 billion, to be fully realized within three to four years of closing of the merger.
These synergies are expected to be derived primarily from procurement, cost savings and other operational matters. ■