Walgreens Boots Alliance, parent company of the Illinois-based Walgreens drug store chain, has agreed to acquire East Pennsboro Township-based Rite Aid Corp. for $9.4 billion.
Walgreens will pay $9 a share in cash for Rite Aid, according to a report from the Wall Street Journal.
The deal gives U.S. top dog Walgreens (8,200 stores, $37.2 billion in assets) control of No. 3 Rite Aid (4,600 stores, $6.94 billion in assets); No. 2 pharmacy chain CVS (7,800 stores, $25.9 billion in assets) now will have a run for its money in the highly-competitive sector.
• 1962: Alex Grass buys the Thrif D Discount Center in his native Scranton, selling health, beauty and household items.
• 1963: Grass launches five more stores, but they are still non-pharmacies.
• 1966: The first Rite Aid pharmacy opens inside a Thrif D store in New York state.
• 1968: The chain goes public, changes name to Rite Aid Corp.
• 1969: Rite Aid purchases the 47-store Daw Drug Co. of Rochester, N.Y.
• 1980s: Further expansions take the chain past 2,000 stores as it tops $1 billion in revenue.
• 1995: Martin Grass succeeds his father as chairman and CEO.
• 1996: Expansions to the West Coast and the Gulf Coast regions through the acquisitions of Thrifty PayLess Holdings Inc., Harco Inc. and K&B Inc. add more than 1,000 stores to the company.
• 1999: Martin Grass is forced out in what was then the largest accounting fraud scandal in U.S. history. Grass eventually pleads guilty and is sentenced to eight years in federal prison. Five other executives plead guilty or are convicted.
• 2000: A new management team that includes Chairman and CEO Robert Miller, CFO John Standley, and President and COO Mary Sammons orchestrates a turnaround plan that includes billions of dollars in refinancing, the sale of Rite Aid’s prescription-plan administration business and other moves.
• 2004: Rite Aid seeks to buy Eckerd from J.C. Penney but loses out to Canadian firm Jean Coutu Group Inc. Three years later, Rite Aid buys Eckerd from Jean Coutu along with the Brooks chain, adding more than 1,800 stores. Jean Coutu receives an ownership stake in Rite Aid as part of the deal, which cost $3.4 billion and doubled Rite Aid’s debt.
• 2008: Recession hits the chain hard. Rite Aid loses $1.1 billion in fiscal 2008, $2.9 billion in fiscal year 2009 and $506.7 million in fiscal year 2010.
• 2010: John Standley named CEO.
• 2014: Signs of recovery noted. Rite Aid posts second year of growth after five years of losses. Stock price tops $8; in 2009, shares had sold for less than a quarter.
• March 2015: Rite Aid finds itself at the center of acquisition rumors after comments by Walgreens Boots Alliance Inc. acting CEO Stefano Pessina. The rumors persist for months.
• June: 58 percent of Rite Aid’s shareholders approve a policy limiting the accelerated benefits enjoyed by its contracted executives — the so-called “golden parachute” clause.
Tuesday’s Wall Street Journal report on the talks sent Rite Aid’s stock (RAD) soaring, up more than 42 percent by day’s end, to $8.67.
Stay tuned for updates to this story as it develops..