Walgreens-Rite Aid Agree to $17.2 Billion Merger
Walgreens Boots Alliance said it will acquire all outstanding shares of Rite Aid for $9 per share in cash, for a total enterprise value of approximately $17.2 billion, including acquired net debt. The deal was approved by the directors of both companies and announced on Oct. 27.
Walgreen Co., based in Deerfield, Illinois, and Alliance Boots, based in the United Kingdom, operate a combined 13,100 stores in 11 countries. Rite Aid, based in Camp Hill, Pennsylvania, operates nearly 4,600 stores in 31 states and the District of Columbia.
Both companies have sizeable private truck fleets. Walgreen ranks No. 43 on the Transport Topics Top 100 list of largest private carriers in the United States, Canada and Mexico with 754 tractors, 14 straight trucks and 1,848 trailers. The company operates more than 350 distribution centers worldwide. Rite Aid ranks No. 24 on the list of largest private carriers in the wholesale and retail distribution sector with 55 tractors, 1 straight truck and 114 trailers.
Although Rite Aid will continue to operate under its existing brand name as a subsidiary of Walgreens Boots Alliance, company officials said that the business combination is expected to generate at least $1 billion in corporate synergies over time.
“This combination will further strengthen our commitment to making quality health care accessible to more customers and patients,” Walgreens Boots Alliance CEO Stefano Pessina said in a statement. “Our complementary retail pharmacy footprints in the U.S. will create an even better network, with our health and wellness solutions available in stores and online.”
John Standley, CEO of Rite Aid, said the deal will provide access to capital to improve the company’s stores as part of “the first global pharmacy-led health and wellbeing enterprise.”
Company officials said they expect the transaction to close in the second half of 2016.
