CHICAGO _ Walgreens Boots Alliance is scuttling its yearslong effort to buy competitor Rite Aid and will instead buy more than 2,000 of its stores for $5.18 billion.
The change follows resistance from federal regulators since the two drugstore chains first proposed a merger in 2015. Thursday morning's announcement represents the second time the two companies have tinkered with terms of a transaction, slashing the price both times, as they tried to win approval from the Federal Trade Commission.
Walgreens also has agreed to pay Rite Aid a $325 million fee for terminating the earlier agreements.
Under the terms of the new deal, Walgreens will acquire 2,186 Rite Aid stores, representing about half of its locations, three distribution centers and other Rite Aid inventory. Walgreens expects to convert the Rite Aid stores into Walgreens stores. The deal is expected to close within the next six months.
"We believe this new transaction addresses competitive concerns previously raised with respect to the prior transaction and will streamline and simplify the transition for customers, team members and other stakeholders," said Stefano Pessina, Walgreens CEO and executive vice chairman, in a news release.
Walgreens had announced in January that it would slash more than $2 billion from its original price and push back the closing date to allow more time to get approval from the FTC.
Walgreens also had announced in December that it would sell 865 Rite Aid stores to Fred's Pharmacy for $950 million to address FTC concerns about the deal. That deal also has been ended, and Walgreens will pay Fred's $25 million for terminating it.
