Walgreens-Rite Aid Merger Still On Track, CEO Says Only 500 Stores Would Close

Image courtesy of oracorac

Walgreens and Rite Aid are the biggest and third-biggest pharmacy drugstore in this country, and they want to join forces to become a pharma-Voltron. The companies are waiting for regulatory approval, but the CEO of Walgreens Boots Alliance told shareholders today that the deal will probably go through by the end of 2016, and that it will result in the closing of only about 500 stores.

Last year, Walgreens Boots Alliance, the holding company that owns Walgreens/Duane Reade in the United States, Boots pharmacies in Europe, and small chains in other countries, made an offer to buy Rite Aid. The smaller company’s shareholders approved the deal, and now both are waiting for the blessing of government regulators.

You can probably think of a spot in your town where you can see a Walgreens from the parking lot of a Rite Aid, and the two chains do overlap in some places. The Federal Trade Commission will most likely recommend that the companies sell some stores to a third competitor, and they’ll probably close some others where there will be Rite Aid and Walgreens stores that are literally neighbors.

CEO Stefano Pessina told investors today during a conference call that the company only expects to close around 500 stores. The company had previously predicted 1,000, and one real estate company calculated that the company could have to close or divest as many as 3,000 stores.

Walgreens Expects to Shutter Only 500 Stores After Rite-Aid Deal Closes [Fortune]

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