By Austen Hufford 

Walgreens Boots Alliance Inc. said it would pay less to buy Rite Aid Corp., cutting at least $2.1 billion off the price tag of the deal as it remains under fire from antitrust regulators.

Walgreens in October 2015 agreed to buy Rite Aid for $9 a share, or about $9.4 billion, in a combination that would result in a drugstore chain with more than 10,000 U.S. stores.

Monday, the companies said they had reached a new deal that would value the company at between $6.8 billion and $7.4 billion, depending on required store divestitures. The per-share value of the new deal will range from $6.50 to $7 a share.

Rite Aid shares dropped 15% in premarket trading to $5.88 as Walgreens shares rose 0.3%.

Antitrust regulators had raised concern that such a big company could hold too much sway in negotiations with pharmacy-benefits managers like CVS Health Corp.'s Caremark or Express Scripts Holding Co., which handle corporate and government drug plans.

The companies, in response to those concerns, said in December that they would sell 865 stores to Fred's Inc. , a regional drugstore chain. The original deal expired Jan. 27. The new deal expires at the end of July.

Walgreens said it could divest up to 1,200 Rite Aid stores and if required to obtain regulatory approval. The exact price per share will be determined based on the number of required store divestitures, with the price ranging from $7 per share if 1,000 stores or fewer are required to be sold, to as low as $6.50 per share if 1,200 stores are required.

At a meeting with investors last week, Walgreens CEO Stefano Pessina said the companies were discussing "all instruments and actions" they could put in place to win approval from the Federal Trade Commission.

Earlier this month, Mr. Pessina said Walgreens had no backup plan should U.S. antitrust regulators reject the tie-up with Rite Aid.

"We don't want even to think the deal could not be approved after so many months," he said.

Write to Austen Hufford at austen.hufford@wsj.com

 

(END) Dow Jones Newswires

January 30, 2017 09:28 ET (14:28 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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