Walgreens Boots Alliance ended its deal to buy Rite Aid after struggling to win antitrust approval, but it will buy nearly half of Rite Aid's stores for $5.18 billion. Fred Katayama reports.
Walgreens won't buy Rite Aid. It struggled to win antitrust approval and decided to nix the deal. Instead, it will shell out $5.18 billion for half of Rite Aid's 4,600 stores. Walgreens also pulled the plug on a related agreement to sell more than a thousand of Rite Aid stores to Fred's. That unleashed an avalanche in stocks involved. Fred's shares plunged. Rite Aid got crushed as well. But Walgreens got a boost. Decision Economics's Cary Leahey: (SOUNDBITE) CARY LEAHEY, SENIOR ADVISER AND CHIEF U.S. ECONOMIST, DECISION ECONOMICS (ENGLISH) SAYING: "One of the few things people want to actually physically touch is stuff is stuff like meat in the locker and vegetables and fruit. But other than that if it's in a package, they don't care. Very few drug drug companies offer those kind of products, and, so, they're highly substitutable. And that's why these kind of companies are running into problems because they haven't come up with an internet alternative sites on companies like Amazon." Analysts say Walgreens' new deal to buy half of Rite Aid's stores will make it easier to gain regulatory approval. The company expects it to close within six months.