The merger agreement between Walgreens and Rite Aid has been modified and extended by six months. The combined company will have to divest an addition 200 stores and the price per common share that Walgreens is offering has gone down.
Walgreens Boot Alliance and Rite Aid Corporation say they have entered into an amendment and extension of their previous merger agreement.
The amendment reduces the price per share for Rite Aid common stock to a high of $7 per share and a low of $6.50 per share. This top price is $2 less per share than had been proposed when the merger was first planned, in 2015. The final price per share will depend on how many stores Rite Aid and Walgreens will have to get rid of.
The new agreement requires the merged company to divest itself of up to 1,200 Rite Aid locations, rather than 1,000, and certain other assets so that it can obtain regulatory approval. This is also a change from the original agreement.
In December, Rite Aid announced that if the merger went through, the combined company would sell 865 of its Rite Aid locations to Fred’s for $950 million, as a way to satisfy antitrust issues arising from the merger. How this deal changes remains to be seen.
The agreement has been extended until July 31, 2017. This extra time should allow the parties to obtain the needed regulatory approval.
The entire merger still needs to be approved by those who hold Rite Aid common stock. There are also waiting periods that may apply under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Michael Polzin, a spokesperson for Walgreens, said that the company does not have any further comment on its press release about the amendment and extension. Drug Topics reached out to Rite Aid for comment, but has not received a response.