Walgreens Boots Alliance said Tuesday that it has secured regulatory clearance to proceed with an again-amended deal to purchase Rite Aid Stores, and would begin the process of acquiring the units next month.
The approval brings an end to a process that began nearly two years ago when Walgreens proposed buying Rite Aid in its entirety. That deal was amended several times due to antitrust concerns, most recently in June when Walgreens reduced its offer to $5.175 billion for 2,186 stores and three distribution centers. On Tuesday, Walgreens revealed the deal was reduced to 1,932 stores for $4.375 billion.
Those stores are primarily located in the Northeast and Southern U.S. The distribution centers are located in Dayville, Conn., Philadelphia and Spartanburg, S.C.
Rite Aid, which is continuing with 2,600 unsold stores and six distribution centers as a standalone corporation, was offered the option of participating in Walgreen’s group purchasing organization as a consideration in the final price. Walgreens will also pay cash and the assumption of related real estate leases.
Camp Hill, Pa.-based Rite Aid said it expects to use a substantial majority of the net proceeds to repay debt.
“This is a significant moment for our company, and we are excited about the opportunities this agreement will deliver for our customers and patients, employees and investors,” Walgreens Boots Alliance Vice Chairman and CEO Stefano Pessina said in a statement. “Combining Walgreens retail pharmacy network with a strong portfolio of Rite Aid locations is expected to help us achieve enhanced, sustainable growth while enabling us to broaden our reach and provide greater access to convenient, affordable care in more local neighborhoods across the United States. We are confident in the path ahead and look forward to working together to shape the future of health care and deliver on the full potential these stores bring to our network.”
Store purchases are expected to begin in October, with completion anticipated in spring 2018.
After all stores are acquired, they will be converted to the Walgreens brand in phases over time. Walgreens said it the transition of distribution centers would not begin for at least a year.