Executive Summary

• The largest drugstore chain in the US, Walgreens Boots Alliance, has extended and amended its agreement to acquire the country’s third-largest retail pharmacy chain, Rite Aid. The amendment follows an earlier transaction deadline that was set for the end of January 2017.
• Under the terms of the amendment, Walgreens has reduced its offer price for Rite Aid shares from $9.00 per share to a minimum of $6.50 per share and a maximum of $7.00 per share. The exact price per share will be determined by the number of stores Walgreens will be forced to divest in order to satisfy Federal Trade Commission (FTC) antitrust concerns and receive approval for the deal.
• The expected closing date for the transaction has been delayed to July 2017. Walgreens first announced the proposed takeover deal in October 2015, and has been forced to push back the closing date, as the FTC has not finished assessing if the proposed merger complies with antitrust law.
• The amended deal provides scope for a greater number of store divestitures than previously expected and reflects the weakening fundamentals of the Rite Aid business since the merger was originally announced.