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Walgreens says it could close 1,000 of its own stores to make Rite Aid deal work

Walgreens Boots Alliance Inc. is willing to shed as many as 1,000 stores if required by regulators scrutinizing its $17.2 billion plan to purchase Rite Aid Corp.

That’s what the Illinois-based pharmacy giant says in a presentation to investors, which was filed with the U.S. Securities and Exchange Commission Monday.

News of the proposed sale was announced last week. If all goes according to plan, the $9 per-share-deal is expected to close in the second half of 2016.

The presentation also states that Walgreens Boots Alliance believes “the most likely outcome” would be the divestiture of less than half that many stores.

Walgreens Boots Alliance Inc. operates more than 13,100 stores around the world, with 8,200 of them in the U.S.

East Pennsboro Township-based Rite Aid has about 4,600 stores nationwide, with more than 70 in the midstate.

So far, Rite Aid and Walgreens officials aren’t saying how the sale would affect Rite Aid’s presence in the midstate, where corporate operations employ about 2,250 people, Rite Aid spokeswoman Ashley Flower has said, plus 600 more in the 33 stores immediately surrounding Harrisburg.

Statements made last week by Walgreens indicated that Rite Aid initially will continue to operate under its existing brand name after the sale, which is expected to be completed in the second half of 2016.

Decisions about integrating the two companies “will be made over time,” a Walgreens corporate statement indicated.

The SEC filing does state that Walgreens expects more than $1 billion in synergies to result, to be fully realized within three to four years of closing.

At the same time, the presentation also states that Walgreens expects the acquisition of Rite Aid to complement its own footprint across the country, filling gaps in the Northeast and Southern California.

Walgreens has only a handful of stores in the midstate.

Another stated benefit: “to develop the Rite Aid retail product offering,” the presentation indicates.

For more on the deal, local reaction and statistics about America’s top pharmacy chains, see CPBJ’s Rite Aid story archive.

Roger DuPuis
Roger DuPuis covers Cumberland County, health care, transportation, distribution, energy and environment. Have a tip or question for him? Email him at [email protected].

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