Walgreens, Rite Aid to divest 865 stores to Fred’s for $950m
Walgreens Boots Alliance and Rite Aid have agreed to divest 865 stores to Fred’s Pharmacy for $950m.
The divestiture also includes select assets related to operations of the stores.
The transaction has been signed to address concerns raised by the Federal Trade Commission (FTC) on the proposed $17.2bn Walgreens-Rite Aid merger deal.
Divestiture of the pharmaceutical stores is subject to approval from the FTC besides the approval and completion of the October 2015 announced acquisition deal of Rite Aid by Walgreens Boots Alliances.
Walgreens Boots Alliance executive vice chairman and CEO Stefano Pessina said: "With this agreement, we are moving ahead with important work necessary to obtain approval of our acquisition of Rite Aid. We look forward to continuing to provide our customers and patients with the highest level of care and attention."
Walgreens said that is actively discussing with the FTC about its merger deal and looking to close the Rite Aid acquisition in early 2017.
If the divestiture transaction of the Rite Aid stores goes through, then Fred’s Pharmacy is likely to become one of the largest pharma chains across the country, with significant presence along the South, East and West Coasts.
As per the agreement terms, Fred’s Pharmacy would continue to employ all store associates and select field and regional associates related to the acquired stores post acquisition.
Rite Aid chairman and CEO John Standley said: "We greatly appreciate the dedication of our Rite Aid associates who are taking great care of our customers and patients during this period.
"We look forward to working closely with Fred's to ensure a smooth, successful transition for our customers, patients and associates in the divested stores."
Fred’s Pharmacy will continue to run the acquired stores under the Rite Aid brand during a transition phase.
Image: A Rite Aid Pharmacy (formerly Eckerd) at 200 North Lasalle Street in Durham, North Carolina. Photo: courtesy of Ildar Sagdejev (Specious).