Pharmacy giant Walgreens Boots Alliance said late Tuesday it is buying competitor Rite Aid for $9 a share in cash, valuing the retail drugstore chain at $17.2 billion when including debt. The deal will combine two of the nation’s leading pharmacies, potentially helping them adapt to fast changing healthcare market.
The merger, Walgreens Boots Alliance said, will increase consumers access to pharmacies and pharmacy benefit managers and is expected to provide Rite Aid with the financial cushion to reinvest in its stores. WBA is the amalgam of Walgreens and European pharmacy giant Alliance Boots, a merger that was completed in two steps at the end of 2014, which created a global industry leader. In May competitor CVS bought Omnicare in a $12.7 billion deal that bolstered the company’s drug delivery channel, Forbes reported.
The string of mergers comes amid a wave of consolidation in the wider healthcare market, particularly among specialty drugmakers, pharmacy benefit managers, insurers and hospitals. This activity is expected to help the industry rationalize overlapping operations and meet pressures to lower healthcare costs after years of above-trend inflation. About Tuesday’s merger, WBA said, “the combination of Walgreens Boots Alliance and Rite Aid creates a further opportunity to deliver a high-quality retail pharmacy choice for US consumers in an evolving and increasingly personalized healthcare environment.”
For Italian billionaire Stefano Pessina a Rite Aid takeover marks his first major deal since becoming permanent CEO this July. “This combination will further strengthen our commitment to making quality healthcare accessible to more customers and patients,” Pessina said in a statement.
“Our complementary retail pharmacy footprints in the US will create an even better network, with more health and wellness solutions available in stores and online. Walgreens Boots Alliance will provide to Rite Aid its global expertise and resources to accelerate the delivery of integrated frontline care, and to offer innovative solutions for providers, payers and other entities in the US healthcare system,” he added.
