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viewWalgreens Boots Alliance Inc

Walgreens Boots to acquire Rite Aid in $17.2bn deal

Walgreens Q4 profit beats estimates on increased prescriptions, cost cuts.

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Walgreens controls 31% and Rite Aid has 10% in the pharmacy and drug-store business.

Walgreens Boots Alliance (NASDAQ:WBA) agreed to acquire Rite Aid (NYSE:RAD)  in a $17.2 billion deal and reported profit that topped analysts’ estimates in its fourth quarter.

The deal would combine the second and third largest drug-store operators and would intensify the already tough competition with CVS Health.

CVS has 58% market share in the pharmacy and drug-store business, Walgreens controls 31% and Rite Aid has 10%.

Walgreens said in a statement on Tuesday that it is paying $9 per share in cash in a valuation that includes the assumption of debt. That reflects a 48% premium above Rite Aid's value at the close of trading Monday.

On Wednesday, Deerfield, Illinois-based Walgreens reported fiscal fourth-quarter earnings, Excluding one-time items, were $0.88 per share. That surpassed the $0.81 average of analysts’ estimates compiled by Capital IQ

Revenue totaled $28.5bn, equaling analysts’ estimates.

The company’s pharmacies filled 222mln prescriptions in the quarter, up 4.6 percent from a year before.

The drugstore chain said it has saved $799mln this fiscal year from cost cuts,

Shares of Walgreens fell 1.9% to $95.16 as of 8:32 in premarket trades in New York.

Quick facts: Walgreens Boots Alliance Inc

Price: 41.13 USD

NASDAQ:WBA
Market: NASDAQ
Market Cap: $35.64 billion
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