Walgreens Boots Alliance Inc. agreed to buy Rite Aid Corp. for about $9.4 billion, in a move that would create a drugstore giant at a time when companies in nearly every corner of the health-care industry are seeking to gain advantage from bulking up.
Walgreens agreed to pay $9 a share in cash for Rite Aid, offering a 48% premium to Rite Aid's closing price Monday. Rite Aid's stock rose 43% to $8.67 Tuesday after The Wall Street Journal reported on the deal talks.
A combination of the pharmacy chains would add to a blockbuster year for healthcare mergers and acquisitions. Drug makers, hospital chains, health insurers and others have already struck some $520 billion of mergers this year, according to Dealogic, as the Affordable Care Act and other developments pressure companies to bulk up, increase leverage with suppliers and lower costs. The surge comes amid a broader wave of M&A, with 2015 set to be one of the busiest years ever for M&A.
Putting their drugstore networks together - which together include some 13,000 stores -- could yield cost savings at a time when the companies have been beset by drug-cost inflation. Other benefits could be derived from marrying Walgreens' wholesale operation with Rite Aid and Rite Aid's prescription-processing operation with Walgreens.
http://www.foxbusiness.com/markets/2015/10/27/walgreens-boots-to-buy-rite-aid-in-172-billion-deal/
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