Hart-Scott-Rodino waiting period expires for amended purchase
agreement with Rite Aid
Final transaction includes 1,932 stores and related assets for $4.375
billion in cash
Store purchases expected to begin in October with completion
anticipated in spring 2018
Walgreens Boots Alliance expects to realize more than $300 million in
annual synergies within four years
DEERFIELD, Ill.--(BUSINESS WIRE)--
Walgreens Boots Alliance, Inc. (Nasdaq: WBA) announced today that it has
secured regulatory clearance for an amended and restated asset purchase
agreement to purchase 1,932 stores, three distribution centers and
related inventory from Rite Aid Corporation (NYSE: RAD) for $4.375
billion in cash and other consideration. The amended and restated
purchase agreement between the parties updates the terms of the
agreement with Rite Aid announced in June 2017. The transaction has been
approved by the boards of directors of Rite Aid and Walgreens Boots
Alliance and is still subject to other customary closing conditions.
Store purchases are expected to begin in October, with completion
anticipated in spring 2018.
The consideration for the transaction will now be $4.375 billion in
cash, the assumption by Walgreens Boots Alliance of the related real
estate leases and the grant of the option to Rite Aid, exercisable
through May 2019, to become a member of Walgreens Boots Alliance's group
purchasing organization, Walgreens Boots Alliance Development GmbH.
Walgreens Boots Alliance will also assume certain limited store-related
liabilities as part of the new transaction.
"This is a significant moment for our company, and we are excited about
the opportunities this agreement will deliver for our customers and
patients, employees and investors," said Walgreens Boots Alliance
Executive Vice Chairman and CEO Stefano Pessina. "Combining Walgreens
retail pharmacy network with a strong portfolio of Rite Aid locations is
expected to help us achieve enhanced, sustainable growth while enabling
us to broaden our reach and provide greater access to convenient,
affordable care in more local neighborhoods across the United States. We
are confident in the path ahead and look forward to working together to
shape the future of health care and deliver on the full potential these
stores bring to our network."
After all stores are acquired, stores are planned to be converted to the
Walgreens brand in carefully planned phases over time. The stores to be
purchased are located primarily in the Northeast and Southern U.S., and
the three distribution centers to be purchased are located in Dayville,
Conn., Philadelphia, Pa., and Spartanburg, S.C. The transition of these
distribution centers to Walgreens will not begin for at least 12 months.
Due to the expected timing of store purchases under the amended and
restated asset purchase agreement, Walgreens Boots Alliance does not
expect the transaction to have a significant impact to its adjusted
diluted net earnings per share in its fiscal year ending 31 August 2018.
The company expects to realize annual synergies from the new transaction
of more than $300 million, which are expected to be fully realized
within four years of the initial closing of the new transaction and
derived primarily from procurement, cost savings and other operational
The amended and restated asset purchase agreement replaces the earlier
purchase agreement entered into by the parties in June 2017, which
included 2,186 stores and related assets for $5.175 billion in cash and
Notes to Editors:
About Walgreens Boots Alliance
Walgreens Boots Alliance (Nasdaq: WBA) is the first global pharmacy-led,
health and wellbeing enterprise.
The company was created through the combination of Walgreens and
Alliance Boots in December 2014, bringing together two leading companies
with iconic brands, complementary geographic footprints, shared values
and a heritage of trusted health care services through pharmaceutical
wholesaling and community pharmacy care, dating back more than 100 years.
Walgreens Boots Alliance is the largest retail pharmacy, health and
daily living destination across the USA and Europe. Walgreens Boots
Alliance and the companies in which it has equity method investments
together have a presence in more than 25* countries and employ more than
400,000* people. The company is a global leader in pharmacy-led, health
and wellbeing retail and, together with the companies in which it has
equity method investments, has over 13,200* stores in 11* countries as
well as one of the largest global pharmaceutical wholesale and
distribution networks, with over 390* distribution centers delivering to
more than 230,000** pharmacies, doctors, health centers and hospitals
each year in more than 20* countries. In addition, Walgreens Boots
Alliance is one of the world's largest purchasers of prescription drugs
and many other health and wellbeing products.
The company's portfolio of retail and business brands includes
Walgreens, Duane Reade, Boots and Alliance Healthcare, as well as
increasingly global health and beauty product brands such as No7,
Botanics, Liz Earle and Soap & Glory.
In October 2016Walgreens Boots Alliance received the United Nations
Foundation Global Leadership Award for its commitment to the UN's
Sustainable Development Goals. The company also ranks No. 1 in the Food
and Drug Stores industry of Fortune magazine's 2017 list of the World's
Most Admired Companies.
More company information is available at www.walgreensbootsalliance.com.
* As of 31 August 2016, using publicly available information for
** For 12 months ending 31 August 2016, using publicly available
information for AmerisourceBergen.
Cautionary Note Regarding Forward-Looking Statements
All statements in this publication that are not historical statements
are forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Such
statements include, but are not limited to, statements regarding the
amended and restated asset purchase agreement between the Company,
Walgreen Co. and Rite Aid and the transactions contemplated thereby and
the possible timing and effects thereof, and the ability of the parties
to complete the transactions considering the various closing conditions.
Words such as "expect," "pending," "potential", "likely," "preliminary,"
"would," "could," "should," "can," "will," "project," "intend," "plan,"
"goal," "continue," "synergy," "on track," "believe," "seek,"
"estimate," "anticipate," "may," "possible," "assume," and variations of
such words and similar expressions are intended to identify such
forward-looking statements. These forward-looking statements are not
guarantees of future performance and are subject to risks, uncertainties
and assumptions, known or unknown, which could cause actual results to
vary materially from those indicated or anticipated. Such risks include,
but are not limited to, risks related to the proposed transactions and
acquisitions generally, including the risk that the transactions may not
close due to one or more closing conditions to the transactions not
being satisfied or waived, risk that the business of the Company or the
Rite Aid stores proposed to be sold to the Company may suffer as a
result of uncertainty surrounding the transactions, risks related to the
ability to realize the anticipated benefits of the proposed
transactions, the outcome of legal and regulatory matters, the risk of
unexpected costs, liabilities or delays, changes in management's
assumptions, the risks associated with the integration of complex
businesses, and risks associated with changes in laws, regulations or
interpretations thereof. These and other risks, assumptions and
uncertainties are described in Item 1A (Risk Factors) of the Company's
Annual Report on Form 10-K for the fiscal year ended August 31, 2016 and
Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2017,
each of which is incorporated herein by reference, and in other
documents that the Company files or furnishes with the Securities and
Exchange Commission. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual
results may vary materially from those indicated or anticipated by such
forward-looking statements. Accordingly, you are cautioned not to place
undue reliance on these forward-looking statements, which speak only as
of the date they are made. Except to the extent required by law, the
Company does not undertake, and expressly disclaims, any duty or
obligation to update publicly any forward-looking statement after the
date of this publication, whether as a result of new information, future
events, changes in assumptions or otherwise.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170919005472/en/
Walgreens Boots Alliance
USA / Michael
+1 847 315 2935
International / Laura Vergani
(0)207 980 8585
Gradwell and Ashish Kohli
+1 847 315 2922
Source: Walgreens Boots Alliance
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