Walgreens Boots Alliance, Inc. has announced in a press release that it will be acquiring Rite Aid Corporation in an all-cash transaction that is valued at approximately $17.2 billion, including acquired net debt.
The acquisition expands Walgreens' role of delivering high-quality retail pharmacy of choice for consumers in the U.S.
Walgreens said in the press release that their focus on building a differentiated in-store experience for health, wellness and beauty will help accelerate Rite Aid's own efforts to enhance the consumers' experience.
The company plans to further transform Rite Aid's stores to better meet consumers' needs.
Stefano Pessina, the executive vice chairman and CEO of Walgreens, said in the press release that the acquisition is another step in the company's "global development" and continues their strategy for "profitable growth."
"This combination will further strengthen our commitment to making quality healthcare accessible to more customers and patients," he said. "Our complementary retail pharmacy footprints in the U.S. will create an even better network, with more health and wellness solutions available in stores and online."
John Standley, the chairman and CEO of Rite Aid, adds in the press release that the transaction enhances their company's ability to meet the health and wellness needs of their customers.
With the help of Walgreens, the company "can continue to build upon this great work through access to increased capital that will enhance our store base and expand opportunities as part of the first global pharmacy-led, health and wellbeing enterprise," he said.
Bloomberg adds that the transaction combined the second and third largest drugstore chains in the U.S. with combined total locations of 12,800.
The acquisition also helps Walgreens overtake market leader and rival CVS Health Corp.
Bloomberg adds that the acquisition also gives Walgreens access into the business of managing drug benefits for insurers and employers.
This is an area where its rival CVS is already a leader.
Under the terms of the agreement, Rite Aid shareholders will receive $9 in cash for each share of Rite Aid common stock, according to the press release.
The purchase price represents a 48 percent premium to Rite Aid's closing price on October 26, 2015.
The transaction is also expected to be accretive to Walgreens' adjusted earnings per share in its first full year after completion, according to the press release.
The transaction is expected to close in the second half of calendar 2016.
