Walgreens Boots Alliance, Rite Aid Corp. agree to sell 865 Rite Aid stores

Deerfield, Ill.-based Walgreens Boots Alliance and Camp Hill, Pa.-based Rite Aid Corp. said today that they have entered into an agreement to sell 865 Rite Aid stores and certain assets related to store operations to Memphis, Tenn.-headquartered Fred’s Inc. for $950 million in an all-cash transaction. The transaction is subject to Federal Trade Commission (FTC) approval, the approval and completion of the pending acquisition of Rite Aid by Walgreens Boots Alliance, and other customary closing conditions.

The agreement is being entered into in response to concerns identified by the FTC in its review of the proposed acquisition of Rite Aid by Walgreens Boots Alliance, which was announced in October 2015. Walgreens Boots Alliance is actively engaged in discussions with the FTC regarding the transaction and is working toward a close of the Rite Aid acquisition in early 2017, the company said.

The proposed divestiture transaction, if approved, would establish Fred’s Pharmacy as one of the largest drugstore chains in the United States, with significant presence in the South and on the East and West Coasts. Specific locations of the stores to be divested will be announced upon FTC approval of the merger. During a transition period, Fred’s Pharmacy would continue to operate the acquired stores under the Rite Aid banner.

“We are pleased to have found an experienced pharmacy operator for these stores,” said Stefano Pessina, executive vice chairman and CEO of Walgreens Boots Alliance, in a statement. “With this agreement, we are moving ahead with important work necessary to obtain approval of Rite Aid.”

Rite Aid Chairman and CEO John Standley added, “We look forward to working closely with Fred’s to ensure a smooth, successful transition for our customers, patients and associates in the divested stores.”