Fred’s Inc. has finalized an agreement with Walgreens Boots Alliance and Rite Aid to acquire 865 Rite Aid stores in the eastern and western United States for $950 million cash.
According to a Fred’s press release, closing of the transaction is expected to take several months after Walgreens Boots Alliance’s proposed acquisition of Rite Aid is completed and is subject to approval by the Federal Trade Commission as well as customary regulatory approvals and closing conditions.
The transaction, if approved, is targeted to close during the first half of 2017 and will position Fred’s Pharmacy as the third-largest drug store chain in the U.S. and create a new national competitor, company officials said. News of the deal on Tuesday, December 20, drove Fred’s stock price up some 60% in morning trading, with the per share price trading around $18.
“This will be a transformative event for Fred’s Pharmacy that will accelerate our health care growth strategy through our acquisition of 865 new stores located in highly attractive markets,” said Michael Bloom, Fred’s CEO. “We believe that this transaction will also create tremendous opportunities for both our new and existing front of store and pharmacy team members.”
Bloom said Fred’s has been working for several months on integration plans in an effort to ensure a seamless transition for Rite Aid customers and employees.
