Rite Aid completes its store transfers to Walgreens

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Rite Aid completes its store transfers to Walgreens

By Michael Johnsen - 03/28/2018
The transition is over.

Rite Aid on Tuesday finalized the transfer of 1,932 stores and related assets to Walgreens Boots Alliance in return for $4.2 billion. The transfer of the three distribution centers and related inventory is expected to begin after Sept. 1, 2018.

The majority of the closing conditions have been satisfied, and the transfers of Rite Aid distribution centers and related assets remain subject to minimal customary closing conditions applicable only to the distribution centers being transferred at such distribution center closing.

As part of its quarterly earnings report, Walgreens on Wednesday noted that the newly transferred Rite Aid stores will be a significant tailwind behind pharmacy results. “We expect to continue to grow, in part through the recent acquisition of stores from Rite Aid, and today we are raising our fiscal 2018 guidance,” Stefano Pessina, executive vice chairman and CEO of the Deerfield, Ill.-based retailer, said.

Walgreens raised the lower and upper ends of its guidance for fiscal 2018 and now anticipates adjusted diluted net earnings per share of $5.85 to $6.05.

Rite Aid also announced that its board of directors has terminated the tax benefits preservation plan that it adopted on Jan. 3, 2018. As a result of the Plan, Rite Aid protected approximately $2.2 billion of Rite Aid’s net operating losses. The Plan was originally scheduled to expire on Jan. 3, 2019.

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