Walgreens-Rite Aid will sell 865 Rite Aid stores to Fred’s Pharmacy

After nearly 14 months of back-and-forth with the Federal Trade Commission, Walgreens Boots Alliance and Rite Aid have agreed to divest 865 Rite Aid stores to Fred’s Pharmacy. The number of stores involved is in the range of WBA’s expectation when the $17.2-billion acquisition of Rite Aid was announced in October 2015. Final approval with FTC is still pending; now, WBA expects the acquisition to be finalized in early 2017.

The sale of the pharmacies to Fred’s will generate $950 million for WBA. Fred’s, headquartered in Memphis, TN, operates 370 pharmacies, primarily in the Southeast; now it should have a national presence depending on which stores are chosen. Prior to the acquisition, WBA had 8,173 US stores (and about 5,000 more in Europe), while Rite Aid had 4,571, so when the dust settles, WBA will have about 11,879, and Fred’s, 1,235. For the time being, WBA will retain the Rite Aid name, as it has done with Duane Reade in the US, and Boots and Alliance Healthcare in Europe. With the acquisition, WBA now holds the title of No. 1 US chain pharmacy by store count, jumping ahead of CVS Health’s 9,600.