In a move to satisfy antitrust concerns, Walgreens Boots Alliance and Rite Aid have announced the all-cash sale of 865 Rite Aid stores to a smaller drugstore chain, Fred's Pharmacy, for $950 million.
Walgreens Boots Alliance of Deerfield, Illinois, owns Walgreens, Boots and other companies. In 2015, they announced their proposed merger with Rite Aid, and are working to close the deal by early 2017, the company said.
The acquisition is pending approval of the Federal Trade Commission. The divestiture, announced Tuesday, is being entered into to satisfy FTC concerns.
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If the sale of the 865 Rite Aid stores is approved, Fred's Pharmacy would become a large player in the South as well as on the East and West Coasts. It would become the country's third largest drugstore chain, behind Walgreens and CVS.
Fred's Pharmacy would continue to operate the acquired stores under the Rite Aid banner during a transition period, Walgreens Boots Alliance said. Fred's would purchase additional stores if the FTC requires further divestiture.
Walgreens Boots Alliance said it expects to save in excess of $1 billion within three to four years of the merger, from efficiencies realized in procurement and other operations.