Walgreens Boots Alliance, the largest pharmacy chain in America, announced its acquisition of major competitor Rite Aid late Tuesday.
Walgreens will spend $17.2 billion on Rite Aid’s shares and debt to gain 4,570 stores in 31 states when the deal closes. While some stores, especially in regions where Walgreens and Rite Aid are competing, will likely close, the acquisition will bring the total number of Walgreens stores in the U.S. to approximately 13,000.
The consolidation creates a clear powerhouse in the pharmacy industry, with the largest remaining competitor, CVS, owning only 7,800 stores.
“Customers and patients will benefit from greater choice, access and everyday reliable value, as well as our ability to compete even more effectively against other retailers,” Walgreens spokesman Phil Caruso recently told American Pharmacy News.
Caruso said that increased effectiveness comes, in part, from combining cost-saving measures. Walgreens expects to save $1 billion by cutting costs and enhancing purchasing power. Approximately 70 percent of sales from both chains come from pharmacy services, and increased leverage in that sector will lead to increased access to medicine, Caruso said.
“With Rite Aid expanding our reach to U.S. consumers, Walgreens Boots Alliance will be even better able to deliver high-quality retail and wholesale products, services and support to customers, patients, payers and health care partners across the country,” Caruso said.
While this deal leaves CVS as Walgreens' only major pharmacy competitor, major supermarket chains including Wal-Mart, Kroger and Meijer also provide competition in the area of pharmacy services.
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