Walgreens and Rite Aid deal drags on as share price is reduced

The takeover of the US pharmacy chain was scheduled for January but has been pushed back to July

Walgreens Boots alliance and Rite aid have amended the terms of their merger.

Walgreens was due to acquire all outstanding shares of retail pharmacy chain Rite Aid by 27 January, however, the takeover was still pending discussions with the antitrust regulator Federal Trade Commission on 5 January.

The amendment set out involves a reduction of the Rite Aid common stock share price to be paid by Walgreens.

Walgreens was due to acquire all outstanding shares of Rite Aid for $9 per share totalling $17.2bn, including acquired net debt.

However, the share price has now been reduced and set between $6.50-$7.

Walgreens may now also be required to sell up to 1,200 Rite Aid stores to obtain regulatory approval.

The exact number of stores required to be sold will dictate the share price, with the price set at $7 per share if 1,000 stores or fewer are to be sold and $6.50 per share if 1,200 stores are divested.

If the required number is between 1,000-1,200 stores, then there will be a pro-rata adjustment.

The acquisition end date has also been extended to 31 July to allow time for both companies to obtain regulatory approval.

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