As per the agreement, Walgreens will buy all the outstanding shares of Rite Aid for $9 per share in cash. This price represents 48% of the closing price per share as on 26 October 2015.
Through this deal, Walgreen Boots Alliance plans to build customized in-store experience for health, wellness and beauty segments.
Following completion of the acquisition, Walgreens intends to renovate Rite Aid’s stores to meet customer demands in a better way.
Walgreens Boots Alliance executive vice chairman and CEO Stefano Pessina said: "This combination will further strengthen our commitment to making quality healthcare accessible to more customers and patients. Our complementary retail pharmacy footprints in the US will create an even better network, with more health and wellness solutions available in stores and online.
"Walgreens Boots Alliance will provide to Rite Aid its global expertise and resources to accelerate the delivery of integrated frontline care, and to offer innovative solutions for providers, payers and other entities in the US healthcare system. Finally, this combination will generate a stronger base for sustainable growth and investment into Rite Aid stores, while realizing synergies over time."
Rite Aid Chairman and CEO John Standley said: "This transaction is a testament to the hard work of all our associates to deliver a higher level of care to the patients and communities we serve. Together with Walgreens Boots Alliance, the Rite Aid team 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."
The deal has secured approval from the board of directors of both the companies. However, it it is yet to secure approval from Rite Aid’s common stock holders as well as meet other customary closing conditions.
The acquisition process is expected to be completed in the second half of 2016.
Once the deal is completed, Rite Aid will become a fully owned subsidiary of Walgreens Boots Alliance.