Walgreens will be paying a 48% premium on Rite Aid’s $6.08 per share closing price on Monday, i.e. $9.00 per share in cash for all outstanding Rite Aid shares.
Advertisement
The now-confirmed deal between Walgreens and Rite Aid comes at a time of great consolidation and activity in the retail health and wellness space.
Walgreens Boots Alliance just announced a $17.2 billion deal to buy Rite Aid, and there is one clear victor on Wall Street. The boards of both firms have already approved the deal, but it will still be subject to regulatory approval and a vote by Rite Aid shareholders.
“Today’s announcement is another step in Walgreens Boots Alliance’s global development and continues our profitable growth strategy”, Walgreens Boots Allliance executive vice chairman and CEO Stefano Pessinan said.
The Journal also reported that three Chinese companies were interested in bidding for hotel chain Starwood, valued by the market at about $US12 billion.
Rite Aid, headquartered Camp Hill, Pa., is the nation’s third-largest retail chain and has about 4,600 drug stores in 31 states, according to the company’s website. The deal is expected to close in the second half of next year. Pessina also has said that he was open to any deals that would increase the value of the company.
The transaction is expected to be accretive to Walgreens Boots Alliance’s adjusted earnings per share in its first full year after completion. That combination created Walgreens Boots Alliance Inc., which runs more than 13,200 stores and 350 distribution centers in 11 countries.
Advertisement
Walgreens Boots Alliance expects to finance the transaction through a combination of existing cash, assumption of existing Rite Aid debt and issuance of new debt. The merger could likely result in the closure of a few Rite Aid outlets.
