Feds Seeking More Information About Walgreens-Rite Aid Proposed Deal

Walgreens store

As expected, the Federal Trade Commission (FTC) has requested Walgreens Boots Alliance (Nasdaq:WBA) and Rite Aid Corporation (NYSE:RAD) to provide more details about on the companies’ proposal $17.2 billion deal.

This is a second request from the FTC as part of the regulatory process.

In October, Walgreens Boots Alliance announced that it agreed to acquire all outstanding shares of Rite Aid for $9.00 per share in cash, for a total enterprise value of about $17.2 billion, including acquired net debt. Walgreens Boots Alliance plans to finance the transaction through a combination of existing cash, assumption of existing Rite Aid debt and issuance of new debt.

The transaction requires approval of Rite Aid’s stockholders and satisfaction of other customary closing conditions, including expiration or termination of the waiting period under the the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The deal received green signal from the boards of directors of both companies.

“The effect of the second request is to extend the waiting period imposed by the HSR Act until 30 days after Walgreens Boots Alliance and Rite Aid have substantially complied with the request, unless that period is extended voluntarily by the parties or terminated sooner by the FTC,” according to a statement.

Walgreens Boots Alliance is a global pharmacy-led health and wellbeing enterprise in based in Illinois, while a Rite Aid is a Pennsylvania-based retail drugstore chain.

The merger of Walgreens Boots Alliance and Rite Aid will create a “further opportunity to deliver a high-quality retail pharmacy choice for U.S. consumers in an evolving and increasingly personalized healthcare environment,” Walgreens Boots Alliance said in a press release.

Under the agreement, Rite Aid will become a wholly owned subsidiary of Walgreens Boots Alliance upon completion of the merger, and is expected to initially operate under its existing brand name.

The companies expect the deal to close in the second half of 2016.


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