Walgreens Boots Alliance, Inc. (Nasdaq: WBA) and Rite Aid
Corporation (NYSE: RAD) announced today they have entered into an
agreement to sell 865 Rite Aid stores and certain assets related to
store operations to Fred’s, Inc. (Nasdaq: FRED) for $950 million in
an all-cash transaction. The transaction is subject to Federal
Trade Commission (FTC) approval, the approval and completion of the
pending acquisition of Rite Aid by Walgreens Boots Alliance, and
other customary closing conditions.
This Smart News Release features multimedia.
View the full release here:
http://www.businesswire.com/news/home/20161220005514/en/
The agreement is being entered into to respond to concerns
identified by the FTC in its review of the proposed acquisition of
Rite Aid by Walgreens Boots Alliance, which was announced in
October 2015. Walgreens Boots Alliance is actively engaged in
discussions with the FTC regarding the transaction and is working
toward a close of the Rite Aid acquisition in early calendar
2017.
The proposed divestiture transaction, if approved, would
establish Fred’s Pharmacy as one of the largest drugstore chains in
the United States with significant presence in areas such as the
South and on the East and West Coasts. Specific locations of the
stores to be divested will be announced upon FTC approval of the
Walgreens Boots Alliance and Rite Aid merger.
Under the terms of the purchase agreement, Fred’s Pharmacy would
acquire 865 Rite Aid stores and certain assets related to store
operations, and expects to continue to employ all store associates
and certain field and regional associates related to the operations
of the acquired stores upon completion of the divestiture. Fred’s
Pharmacy would continue to operate the acquired stores under the
Rite Aid banner during a transition period. If the FTC requires
divestiture of more than the 865 Rite Aid stores currently
contemplated by the purchase agreement and Walgreens Boots Alliance
agrees to sell such stores, the purchase agreement requires Fred’s
to purchase such additional stores.
Walgreens Boots Alliance continues to expect that it will
realize synergies from the acquisition of Rite Aid in excess of $1
billion, to be fully realized within three to four years of closing
of the merger. These synergies, as previously disclosed, are
expected to be derived primarily from procurement, cost savings and
other operational matters.
“We are pleased to have found an experienced pharmacy operator
for these stores,” said Walgreens Boots Alliance Executive Vice
Chairman and CEO Stefano Pessina. “With this agreement, we are
moving ahead with important work necessary to obtain approval of
our acquisition of Rite Aid. We look forward to continuing to
provide our customers and patients with the highest level of care
and attention.”
“We greatly appreciate the dedication of our Rite Aid associates
who are taking great care of our customers and patients during this
period," said Rite Aid Chairman and CEO John Standley. "We look
forward to working closely with Fred’s to ensure a smooth,
successful transition for our customers, patients and associates in
the divested stores.”
BofA Merrill Lynch acted as Walgreens Boots Alliance’s financial
adviser, with Sidley Austin LLP acting as its legal counsel on
transaction legal matters and Weil, Gotshal & Manges LLP acting
as its legal counsel on antitrust regulatory matters.
Citi acted as Rite Aid’s exclusive financial adviser, with
Skadden, Arps, Slate, Meagher & Flom LLP acting as Rite Aid
Corporation’s legal counsel on transaction legal matters and Jones
Day acting as its legal counsel on antitrust regulatory
matters.
Notes to Editors:
About Walgreens Boots Alliance
Walgreens Boots Alliance (Nasdaq: WBA) is the first global
pharmacy-led, health and wellbeing enterprise.
The company was created through the combination of Walgreens and
Alliance Boots in December 2014, bringing together two leading
companies with iconic brands, complementary geographic footprints,
shared values and a heritage of trusted health care services
through pharmaceutical wholesaling and community pharmacy care,
dating back more than 100 years.
Walgreens Boots Alliance is the largest retail pharmacy, health
and daily living destination across the USA and Europe. Walgreens
Boots Alliance and the companies in which it has equity method
investments together have a presence in more than 25* countries and
employ more than 400,000* people. The company is a global leader in
pharmacy-led, health and wellbeing retail and, together with the
companies in which it has equity method investments, has over
13,200* stores in 11* countries as well as one of the largest
global pharmaceutical wholesale and distribution networks, with
over 390* distribution centers delivering to more than 230,000**
pharmacies, doctors, health centers and hospitals each year in more
than 20* countries. In addition, Walgreens Boots Alliance is one of
the world’s largest purchasers of prescription drugs and many other
health and wellbeing products.
The company’s portfolio of retail and business brands includes
Walgreens, Duane Reade, Boots and Alliance Healthcare, as well as
increasingly global health and beauty product brands, such as No7,
Botanics, Liz Earle and Soap & Glory. More company information
is available at www.walgreensbootsalliance.com.
* As of 31 August 2016, using publicly available information for
AmerisourceBergen.
** For 12 months ending 31 August 2016, using publicly available
information for AmerisourceBergen.
(WBA-GEN)
About Rite Aid
Rite Aid Corporation (NYSE: RAD) is one of the nation's leading
drugstore chains with nearly 4,600 stores in 31 states and the
District of Columbia and fiscal 2016 annual revenues of $30.7
billion. Information about Rite Aid, including corporate background
and press releases, is available through the company's website at
www.riteaid.com.
Cautionary Note Regarding Forward Looking Statements
Certain statements in this press release may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as
“anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,”
“intend,” “may,” “plan,” “predict,” “project,” “should,” and “will”
and variations of such words and similar expressions are intended
to identify such forward-looking statements.
All statements, other than historical facts, including
statements regarding the expected timing of the closing of the
transactions; the ability of the parties to complete the
transactions considering the various closing conditions; the
expected benefits of the transactions such as improved operations,
enhanced revenues and cash flow, growth potential, market profile
and financial strength; the competitive ability and position of the
companies following completion of the proposed transactions; and
any assumptions underlying any of the foregoing, are
forward-looking statements. The inclusion of such statements should
not be regarded as a representation that such plans, estimates or
expectations will be achieved. These forward-looking statements are
based upon current plans, estimates and expectations, are not
guarantees of future performance and involve risks, assumptions and
uncertainties, including, but not limited to, risks related to the
possibility that the transactions may not close, including because
one or more closing conditions to the transactions, including
certain regulatory approvals, may not be satisfied or waived, on a
timely basis or otherwise, including that a governmental entity may
prohibit, delay or refuse to grant approval for the consummation of
the transactions, or may require conditions, limitations or
restrictions in connection with such approvals; the risk that there
may be a material adverse change of Rite Aid or the acquired
stores, or the business of Rite Aid or the acquired stores may
suffer as a result of uncertainty surrounding the transactions;
risks related to the ability to realize the anticipated benefits of
the proposed transactions, including the possibility that the
expected synergies from the proposed transactions will not be
realized or will not be realized within the expected time period;
the risk that the businesses and acquired stores, as applicable,
will not be integrated successfully; risks associated with the
financing of the proposed transactions; disruption from the
proposed transactions making it more difficult to maintain business
and operational relationships; significant transaction costs;
unknown liabilities; the risk of litigation and/or regulatory
actions related to the proposed transactions; other business
effects, including the effects of industry, market, economic,
political or regulatory conditions or changes in federal or state
laws or regulations; future exchange or interest rates or credit
ratings; changes in tax laws, regulations, rates and policies;
competitive developments; and risks and uncertainties discussed in
the reports that Walgreens Boots Alliance and Rite Aid have filed
with the U.S. Securities and Exchange Commission. Should one or
more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary
materially from those indicated or anticipated by such
forward-looking statements. Accordingly, you are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date they are made. Walgreens Boots Alliance
and Rite Aid expressly disclaim any current intention to update
publicly any forward-looking statement after the distribution of
this release, whether as a result of new information, future
events, changes in assumptions or otherwise. A further list and
description of risks and uncertainties can be found in Walgreens
Boots Alliance’s Annual Report on Form 10-K for the fiscal year
ended August 31, 2016 and its subsequent filings, and in Rite Aid’s
Annual Report on Form 10-K for the fiscal year ended
February 27, 2016 and its subsequent filings. There can be no
assurance that the requisite regulatory approvals will be obtained,
or that the transactions will be completed within the required time
period. This release does not constitute an offer of any securities
for sale.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161220005514/en/
Walgreens Boots Alliance, Inc.Media RelationsUSA /
Michael Polzin, +1 847 315 2935International / Laura Vergani, +44
(0)207 980 8585Investor RelationsGerald Gradwell and Ashish
Kohli, +1 847 315 2922orRite Aid CorporationMedia
RelationsAshley Flower, +1 717 975 5718Investor
RelationsMatt Schroeder, +1 717 214 8867
Rite Aid (NYSE:RAD)
Historical Stock Chart
From Aug 2024 to Sep 2024
Rite Aid (NYSE:RAD)
Historical Stock Chart
From Sep 2023 to Sep 2024