On Tuesday, Walgreens Boots Alliance Inc, the drugstore chain said that t will acquire Rite Aid Corp, which is a smaller drug store chain in the United States.
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“This combination will further strengthen our commitment to making quality healthcare accessible to more customers and patients”. (WBA), based in Deerfield, Illinois, is the largest US drugstore chain, based on store counts. Instead, he said, the deal will increase Walgreens’ footprint in the US and save money by finding synergies with Rite Aid.
The companies said that this deal was going to be worth $ 17.2 billion including debt.
Rite Aid stores will initially keep its name after the deal closes, Walgreens said, but that may change over time.
This morning, Walgreens Boots Alliance reported better than expected fiscal 2015 fourth quarter earnings and revenue, and mixed full year financial results.
Its revenue climbed to $28.52 billion from $19.06 billion. Finance believes the true inherent value of Rite Aid could be as high as $10.00 per share.
Major Factors: Walgreens Boots introduced guidance for fiscal year 2016 with anticipated adjusted net earnings per share of $4.25 -$4.55 on a diluted basis.
Boards of both companies have approved the deal, but it will be a while before consumers start seeing any impact from it.
“I get one drug, which is what I came in for, and it’s a very low price”, the 61-year-old Temple City resident said.
Walgreens and Rite Aid are now the second and third largest pharmacy chains respectively.
Business analysts say it’s a big loss for central Pennsylvania. “It seems like Walgreens doesn’t have the discounts Rite Aid does”. They may even be able to create more and better paying jobs. It acquired Boots Alliance, a European pharmacy chain, last year.
According to a CNN report, CEO Stefano Pessina believes that Walgreens buying Rite Aid will enable the company to follow the industry consolidation trend. When Walgreens and Rite Aid merge, the company will have nearly 13,200 USA stores nationwide and 350 distribution centers in 11 countries.
Black estimates the corporate office employs around a thousand people.
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Others said that given an extended FTC review of office supplies retailer Staples’ planned takeover of Office Depot, the Walgreens-Rite Aid deal would also be closely scrutinized. Analysts polled by Thomson Reuters had forecast $4.54 a share in earnings.
