1. News
January 30, 2017

Walgreens Boots Alliance and Rite Aid enter into amendment and extension to merger agreement

Global health company Walgreens Boots Alliance has entered an amendment and extension of the earlier definitive merger agreement with US-based retail pharmacy chain Rite Aid.

Global health company Walgreens Boots Alliance has entered an amendment and extension of the earlier definitive merger agreement with US-based retail pharmacy chain Rite Aid.

According to the amendment, Walgreens Boots Alliance will acquire all outstanding shares of Rite Aid, and both parties have agreed to reduce the price of each share of Rite Aid common stock.

Walgreens Boots Alliance will also have to divest nearly 1,200 Rite Aid stores and certain additional related assets to secure the required regulatory approval.

"Both parties have agreed to extend the agreement end date from 27 January to 31 July, as it would give them additional time to obtain regulatory approval."

The precise price of each share will depend on the number of store divestitures. If 1,000 or less stores are required for divestiture, it would be $7 a share. The price would decrease to $6.50 if more than 1,200 stores are affected.

If the required divestitures are between 1,000 and 1,200 stores, then there will be a pro-rata adjustment of the price for each share.

In addition, both parties have agreed to extend the agreement end date from 27 January to 31 July, as it would give them additional time to obtain regulatory approval.

The transaction is subject to approval of the holders of Rite Aid’s common stock, the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and other customary closing conditions.