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CAMP HILL, Pa. — Rite Aid Corp. has completed the transfer of 1,932 stores purchased by Walgreens Boots Alliance Inc. The transfer of three distribution centers and related inventory is expected to begin after September 1.
The majority of the closing conditions of WBA’s $4.375 billion acquisition of the stores and warehouses have been satisfied, Rite Aid reported.
The transfer of the warehouses will be the final chapter of a saga that began in October 2015 when WBA attempted to buy the entire Rite Aid chain for $17.2 billion. Resistance from federal regulators led WBA to scale back the offer last June and then again a few months later.
Rite Aid president and chief operating officer Kermit Crawford has vowed that the company will build “the new Rite Aid.” Crawford said in a third quarter conference call with analysts that the chain will have a number of strengths. It will be a $22 billion company generating more than 180 million prescriptions annually and operating 2,569 drug stores served by six distribution centers. It also boasts strong health care assets on top of expanded clinical pharmacy services, including retail clinic operator RediClinic, health care management specialist Health Dialog and pharmacy benefit manager EnvisionRxOptions, which manages over 4 million lives.
These assets become more significant in light of the benefits of the WBA deal, said Crawford. “The new Rite Aid will be financially stronger with lower debt and more financial flexibility to invest in strategic initiatives that drive our business,” he pointed out.
It will have a more profitable store network with a higher percentage of Wellness stores, he added, and a strong presence in key states including California, Michigan, Pennsylvania, Ohio and New York, with an opportunity to boost market share in each. Rite Aid also gained an “attractive option” to help manage costs through a generic purchasing option with WBA.
The company also announced that its board of directors has terminated the tax benefits preservation plan that it adopted on January 3. As a result of the plan, Rite Aid protected approximately $2.2 billion of its net operating losses.
