Walgreens, Rite Aid extend date of merger agreement to allow for store divestures

Walgreens, Rite Aid extend date of merger agreement to allow for store divestures



Walgreens Boots Alliance and Rite Aid announced that they have mutually agreed to extend the end date of their merger agreement from Oct. 27, 2016 to Jan. 27, 2017.



The companies now expect the transaction will close in early calendar 2017.



"As announced on Sept. 8, 2016, Walgreens Boots Alliance remains actively engaged with the Federal Trade Commission regarding its review of the pending acquisition, and continues to expect that the most likely outcome will be that the parties will be required to divest between 500 and 1,000 stores," Walgreens stated. "The company believes that it will be able to execute agreements to divest these stores to potential buyers, pending FTC approval, by the end of calendar year 2016, and now expects its acquisition of Rite Aid will close in early calendar 2017."



Taking into account its current expectation of store divestitures, Walgreens Boots Alliance continues to expect that the acquisition will be accretive to its adjusted diluted net 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.



On Oct. 27, 2015, the companies entered into a definitive agreement under which Walgreens Boots Alliance agreed to acquire all outstanding shares of Rite Aid for $9 per share in cash. Under the terms of the merger agreement, either party had the right to extend the end date from Oct. 27, 2016 to Jan. 27, 2017 by delivery of notice to the other.