Walgreens to Buy Out Half of Rite-Aid’s Stores After Merger Fails

Published on: 29 Jun, 2017

Walgreens Boots Alliance Inc. (NASDAQ: WBA) currently operating as the second biggest pharmacy store chain in the United States behind CVS Health, saw its shares soar 5% up to $81.02 at opening, while Rite Aid Corporation (NYSE: RAD) shares tanked 22% to $3.07. The driving force behind this was a failed drug deal between the two companies as deals behind their pending merger fell apart.

Walgreens, which specializes in filling prescriptions, health and wellness products, health information, and photo services, has stated that they have ended its deal to buy out Rite Aid Corp. after struggling to win an antitrust approval. The deal was originally set for $9.5 billion late in 2015. Instead, Walgreens is now set to buy half of their smaller rivals, Rite Aid’s, stores for $5.175 billion, accounting for 2,186 Rite -Aid stores being sold to Walgreens, including three Rite Aid distribution centers and inventory.

With this new deal, Walgreens would be operating more than 10,200 stores. In addition, Walgreens will have to pay Rite Aid $325 million for terminating the merger but, Walgreens expects this new transaction to "modestly accretive" to adjusted earnings per share in the first full year after the initial closing, expecting the store purchases to save it more than $400 million over time.

Ratings

Ratings
  • 238Views
  • 0Comments

Recommend to Friends

  • facebook
  • Twitter
  • google plus
  • pinterest
  • Digg
  • stumbleupon
  • Reddit
  • linkedin

Steven Liao

Email: Steven@financialinsiders.com

@Newsletter

Sign Up for Weekly Updates

Related Posts

22 Jun, 2017 161
26 Jun, 2017 168
24 Jul, 2017 143
07 Aug, 2017 559

Comments

There is no comment on this article