Walgreens Boots Alliance Provides Update on its Pending Acquisition of Rite Aid
DEERFIELD, Ill. –(BUSINESS WIRE)– Walgreens Boots Alliance, Inc. (Nasdaq:WBA) today provided the following update on its pending acquisition of Rite Aid Corporation ( NYSE : RAD).
Walgreens Boots Alliance and Rite Aid remain actively engaged with the Federal Trade Commission (FTC) regarding its review of the pending acquisition. As a result of the progress of these discussions with the FTC staff, Walgreens Boots Alliance is exploring potential divestiture remedies to address certain issues raised in those discussions.
In order to expedite that process, Walgreens Boots Alliance now expects that the most likely outcome will be that the parties will be required to divest more than the 500 stores previously communicated, but still continues to expect that fewer than 1,000 stores will be required to be divested. In addition, the company continues to believe that the acquisition will close in the second half of calendar 2016.
Taking into account its current expectation of store divestitures, Walgreens Boots Alliance continues to expect that the acquisition will be accretive to its adjusted earnings per share in the first full year after closing of the transaction. The company also continues to expect that it will realize synergies from the acquisition in excess of $1 billion , to be fully realized within three to four years of closing. These synergies have been updated where practicable and, as previously disclosed, are expected to be derived primarily from procurement, cost savings and other operational matters.
It’s speculated that CVS and Kroger have their eye on the divested locations. However, CVS would face similar FTC pressure if they attempt to acquire a large number of the Walgreens locations. Kroger’s plans for any acquired stores remains unclear with some rumors that they would be converted to small format grocery stores. Kroger currently operates over 2,200 in-store pharmacies.
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 in the USA and Europe and, together with its equity method investments*, employs more than 370,000* people and has a presence in more than 25* countries. Walgreens Boots Alliance is a global leader in pharmacy-led, health and wellbeing retail with over 13,100* stores in 11* countries. The company includes one of the largest global pharmaceutical wholesale and distribution networks with over 350* distribution centers delivering to more than 200,000** pharmacies, doctors, health centers and hospitals each year in 19* 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.
Source: Business Wire
Publication date: 2016-09-08