» Subscribe Today!
The Power of Information
Home
The Ledger - EST. 1978 - Nashville Edition
X
Skip Navigation LinksHome > Article
VOL. 40 | NO. 51 | Friday, December 16, 2016

Walgreens, Rite Aid selling 865 stores to Fred's in $9.4B deal

TOM MURPHY, AP Health Writer

Print | Front Page | Email this story

Walgreens and Rite Aid will sell 865 stores to rival retailer Fred's for $950 million, potentially removing the final roadblock thwarting a tie up between the nation's largest and third-largest drugstore chains.

Wall Street certainly saw it that way, sending shares of all three companies higher in early trading Tuesday.

Walgreens is working to close its $9.4 billion purchase of Rite Aid early next year. It said Tuesday that it's selling the Rite Aid stores in response to concerns raised by federal anti-trust regulators. The deal still needs to be approved by the Federal Trade Commission.

Walgreens Boots Alliance Inc., based in Deerfield, Illinois, announced in October 2015 that it planned to buy Rite Aid in a deal that would create about 12,000 U.S. locations. That's several thousand more than the nearest competitor, CVS Health Corp.

The combination is expected to give Walgreens beefed-up negotiating muscle with drugmakers and other suppliers and to help enlarge its presence in the Northeast and in Southern California. But the nation's largest drugstore chain also knew it would have to drop some stores to ease regulatory worry about competition.

Shortly after announcing the deal, Walgreens said it was willing to divest up to 1,000 stores to win regulatory approval, but it expected it wouldn't have to sell more than 500.

Fred's runs 647 general merchandise discount stores clustered mainly in the Southeast, and it operates 371 full-service pharmacy departments within its stores. It also runs three specialty pharmacies.

Walgreens says its purchase agreement requires Fred's to buy additional stores if the FTC requires the divestiture of more than 865.

Shares of Fred's Inc., based in Memphis, soared 73 percent, or $8.12, to $19.27 Tuesday morning, while broader indexes started off nearly flat. Rite Aid Corp., based in Camp Hill, Pennsylvania, rose 5 percent, or 42 cents, to $8.59; and Walgreens rose 66 cents to $86.72.

Follow us on Facebook, Twitter & RSS:
Sign-Up For Our FREE email edition
Get the news first with our free weekly email
Name
Email  
TNLedger.com Knoxville Editon
RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 0 0 0
MORTGAGES 0 0 0
FORECLOSURE NOTICES 0 0 0
BUILDING PERMITS 0 0 0
BANKRUPTCIES 0 0 0
BUSINESS LICENSES 0 0 0
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0