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    Walgreens plans to buy Rite Aid for $9.4 billion

    Walgreens Boots Alliance on Tuesday announced plans to acquire competitor Rite Aid for $9.4 billion. With assumed debt from Rite Aid, the deal would be worth $17.2 billion.

    If approved by the U.S. Federal Trade Commission, analysts believe the acquisition will improve Walgreens’ ability to negotiate drug prices and to hold off challenges from competitors. Walgreens is the nation’s largest pharmacy chain and Rite Aid is the third largest.

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    Walgreens said it expects the deal to close during the second half of 2016 and that Rite Aid will operate as a wholly owned subsidiary of Walgreens. Rite Aid pharmacies would initially continue to operate under their existing name.

    Walgreens anticipates cost savings of more than $1 billion from buying Rite Aid. However, during a webcast on Wednesday with investors and journalists, Walgreens executives did not comment on the specific areas of cost savings or speculate if regulators might force the company to divest itself of some of the Rite Aid locations to maintain competitive balance in some geographic areas.

    “We have done significant analysis on how we can bring the two companies together, including the antitrust analysis, and we’ll work closely with regulators to bring the transaction to completion as soon as possible,” George Fairweather, Walgreen’s executive vice president and global chief financial officer, said during the webcast.

    Fairweather added: “We must recognize that while some of the [synergies] are relatively easy to identify, others will require investment and will take time to deliver.”

    Mark Lowery, Editor
    Mark Lowery an Editor for Drug Topics magazine.

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    • Anonymous
      How is this merger good for consumers, much less pharmacists? Walgreens, CVS or McDonald's. Your choice.