Walgreens Boots Alliance Inc (NASDAQ:WBA) has agreed to pay $192.5 million to settle a class action lawsuit brought on by Rite Aid (NYSE:RAD) investors, according to a deal filed in Pennsylvania federal court on Wednesday.
The deal is subject to approval by District Judge Jennifer Wilson.
Rite Aid (NYSE:RAD) investors had accused Walgreens and its executive of misleading them about the then-pending $17.2 billion merger of the two drugstore chains by downplaying scrutiny from US antitrust regulators beginning in October 2016.
The merger, first announced in 2015, was scrapped in June 2017 after it failed to gain the approval of the Federal Trade Commission.
Walgreens instead purchased about 42% of Rite Aid (NYSE:RAD)’s existing stores for about $4.38 billion.
The settlement comes as Rite Aid on October 15, 2023, filed for Chapter 11 bankruptcy as it struggles with significant debt and opioid prescription-related lawsuits.
Among other actions, the company intends to close underperforming stores and sell its pharmacy benefit company Elixir.
Under the proposed bankruptcy plan, the company’s shares would be dissolved and shareholders would not receive any compensation.
Walgreens shares traded up 1% at US$21.45 in the early afternoon on Thursday and Rite Aid shares have been halted since the market close on Friday last week, last trading hands at US$0.65.
Contact the author at emily.jarvie@proactiveinvestors.com
Follow her on X, formerly known as Twitter, @emilyjjarvie