Walgreens and Rite Aid have finally devised a combination of the nation’s largest and third-largest drugstore chains that will get past antitrust regulators.
The companies said Tuesday they have Federal Trade Commission clearance for a slimmer version of a store-purchase agreement announced in June. Walgreens will now spend $4.38 billion to acquire 1,932 stores, three distribution centers and inventory.
The drugstore chains had said earlier this summer that Walgreens planned to spend about $5.18 billion on 2,186 stores.
That deal marked a step down from Walgreens’ initial plan to take over Rite Aid Corp. for $9.4 billion. That deal spent a couple of years in regulatory review before the companies abandoned it. Walgreens Boots Alliance Inc. says the latest deal should be completed by spring.
Most of the stores Walgreens will buy are in the Northeastern and Southern U.S., and will be converted to Walgreens stores over time.
The transaction could increase Walgreens’ ability to negotiate lower prices on products, including drugs, which could mean lower prices on some drugs for consumers, said Vishnu Lekraj, a senior analyst with Morningstar. It also allows the chain to expand its market share and go into new markets more cheaply than if it’d opened its own stores.
The smaller deal was “based on ongoing conversations with the FTC,” said Walgreens spokesman Michael Polzin in an email.