Walgreens to Acquire Rite Aid in $17.2 Billion Deal

Executive Summary

• Tuesday, Oct. 27, after the market close, Walgreens Boots Alliance announced an agreement to acquire smaller drugstore chain Rite Aid for $9.4 billion in cash, offering $9 per share in cash, which represents a 48% premium to Rite Aid’s closing price of $6.08 on Monday.Including debt, the deal is valued at $17.2 billion, the company said.
• The deal would bring together the #1 and #3 retail pharmacy companies, creating a pharmacy giant with over 13,000 stores and more than $67.1 billion in combined revenue, according toDrug Store News’s Annual PoweRx Industry Rankings.
• The combined company would have an especially strong presence in California and New York. The combination is expected to realizecost synergies of at least $1 billion annually.
• The boards of both companies have approved the transaction, which must receive Hart-­‐Scott-­‐Rodino approval and is expected to close during the second half of calendar 2016.