Deerfield, Ill.-based Walgreens Boots Alliance and Camp Hill, Pa.-based Rite Aid amended and extended their previous merger agreement under which Walgreens would acquire all outstanding shares of Rite Aid.
Under the terms of the amendment, the parties agreed to reduce the price of each share of Rite Aid common stock depending on the number of pharmacy stores Walgreens will divest to gain regulatory approval. The tentative agreement states Walgreens will divest up to 1,200 Rite Aid pharmacy stores, 200 more than the terms set in the original agreement.
If Walgreens divests 1,000 or fewer stores, the stock price will be set at $7 per share. If the pharmacy retailer divests 1,000 to 1,200 stores, the price per share will be prorated. If the company divests 1,200 stores or more, the stock price will lower to $6.50 per share. Under the original agreement, Walgreens had agreed to pay $9 per share, valuing the company at roughly $9.4 billion when the companies publicized the deal in October 2015, according to a Forbes report.
Both companies also agreed to extend the expiration date on the merger agreement from Jan. 27 to July 31 to allow both parties to obtain the necessary regulatory approvals.