Walgreens To Buy Rival Rite Aid In $17.2bn Deal

Walgreens is buying rival Rite Aid for $9.41bn in a deal that will leave it with nearly 18,000 stores around the world.

The deal, which is worth a total of $17.2bn when debt is included, would combine the largest and third-largest US drugstore chains.

Walgreens Boots Alliance (Xetra: W8A.DE - news) , which also owns Boots stores in the UK, has more than 13,100 stores around the world.

Rite Aid, which is based in Camp Hill, Pennsylvania, has more than 4,600 stores in the US.

The companies said the deal was likely to close in the second half of 2016, although it is likely to draw close scrutiny from anti-trust regulators.

It (Other OTC: ITGL - news) comes less than a year after Walgreens bought European health and beauty retailer Alliance Boots .

As well as its namesake stores, the Illinois-based firm also owns Duane Reade stores in the US.

If it goes through, combining with Rite Aid would give Walgreens additional purchasing power to negotiate prices with drug companies - a major topic in the US after a rapid rise in the cost of some prescriptions.

The company said Rite Aid stores will initially keep the name after the deal, but could change later.

On Wednesday, the company reported a fourth-quarter net income of $26m, after a reporting a loss in the same period a year earlier.

Walgreens has seen its share price rise 25% since the beginning of 2015, and 51% in the last 12 months (Other OTC: UBGXF - news) .