Walgreens Boots Alliance in $17.2bn deal to buy Rite Aid

Walgreens Boots Alliance has agreed to buy US retail pharmacy chain Rite Aid in a $17.2bn deal.

The purchase price of $9.00 a share represents a 48% premium to the closing price per share on 26 October, which was the last day before the agreement was signed.

Executive vice chairman and chief executive officer Stefano Pessina said: “Today’s announcement is another step in Walgreens Boots Alliance’s global development and continues our profitable growth strategy.

“This combination will further strengthen our commitment to making quality healthcare accessible to more customers and patients. Our complementary retail pharmacy footprints in the US will create an even better network, with more health and wellness solutions available in stores and online. Walgreens Boots Alliance will provide to Rite Aid its global expertise and resources to accelerate the delivery of integrated frontline care, and to offer innovative solutions for providers, payers and other entities in the U.S. healthcare system.”

The boards of directors of both companies have approved the transaction, which is expected to be accretive to Walgreens Boots’ adjusted earnings per share in its first full year after completion.

In addition, Walgreens said it expects to realise synergies in excess of $1bn from the deal, which will be financed through a combination of existing cash, assumption of Ride Aid debt and issuance of new debt.

Upon completion of the merger, Rite Aid will be a wholly owned subsidiary of Walgreens Boots Alliance, and is expected to initially operate under its existing brand name.