NEW YORK — Walgreens Boots Alliance Inc. has agreed to acquire Rite Aid Corp. for $9.42 billion in cash, a transaction that would expand its role in the distribution of medications in the United States.
The deal would combine the second- and third-largest US drugstore chains, with a total of about 12,800 locations, helping Walgreens vault past the market leader, CVS Health Corp. The acquisition will add to Walgreens’ earnings beginning a full year after completion and produce more than $1 billion in savings from cost overlaps, the companies said.
Including debt, the deal is valued at $17.2 billion, they said.
Rite Aid shares fell 7.8 percent to $7.99 in late trading after the deal was announced, below Walgreens’ offer of $9 a share, reflecting speculation the transaction will face antitrust scrutiny.
The stock had slumped 29 percent since Sept. 16 after the company cut profit and revenue forecasts for the year, giving Walgreens an opportunity to make an offer. The price represents a 48 percent premium to Rite Aid’s closing price on Monday.
Walgreens shares were little changed in extended trading after rising 6.4 percent to $95.16.
Speculation that Walgreens would pursue Rite Aid rose in March after billionaire Stefano Pessina, who took over in January as interim chief executive at Walgreens after it acquired Alliance Boots, said he envisioned doing his next big deal in the United States.
A Rite Aid deal would also give Walgreens its first foray into the business of managing drug benefits for insurers and employers, an area where CVS leads. Rite Aid entered that business by acquiring Envision Pharmaceutical Services Inc. for about $2 billion this year. If Walgreens aims to get bigger in drug-benefit management, it could use EnvisionRX to acquire other small competitors to build that business, said Ross Muken, at Evercore ISI.
Rite Aid CEO John Standley is eligible to get $23.4 million if he’s terminated after the deal, according to data compiled by Bloomberg.
While Pessina had made clear his appetite for deals, he had been cagey about what kind he might pursue, saying only that the company wanted to participate in what he saw as the inevitable consolidation of the long distribution chain for drugs in the United States.
Elsewhere, CVS agreed in May to purchase nursing-home pharmacy Omnicare Inc. for $12.7 billion. Less than four weeks later, CVS struck a deal to acquire Target Corp.’s pharmacies and clinics for $1.9 billion.