Consolidation in the healthcare market continues with an announcement that Walgreens has entered into an agreement to purchase Rite Aid for a total of $17.2 billion.
Consolidation in the healthcare market continues with an announcement that Walgreens has entered into an agreement to purchase Rite Aid for $9.4 billion, plus it will assume Rite Aid’s $7.4 billion debt and will pay $9 a share for all outstanding shares. The transaction will total of $17.2 billion.
The deal will unite 2 of the country’s 3 biggest drugstore owners, and will undoubtedly draw scrutiny from regulators, The Wall Street Journal reported.
“This combination will further strengthen our commitment to making quality healthcare accessible to more customers and patients,” Walgreens Executive Vice Chairman and CEO Stefano Pessina said in a statement. “Our complementary retail pharmacy footprints in the U.S. will create an even better network, with more health and wellness solutions available in stores and online.”
The combined company will have 12,800 stores compared with CVS Health, which has more than 7800. Walgreens expects the transaction to close in the second quarter of 2016.
Earlier this year, Rite Aid had purchased Envision Pharmaceutical Services for about $2 billion.
The National Community Pharmacists Association (NCPA) is viewing the merger with caution, according to a statement.
“NCPA is evaluating the impact of the merged company on pharmacy small business owners and the patients they serve,” B. Douglas Hooey, RPh, MBA, chief exeutive of NCPA, said in a statement. “At a minimum, regulators should closely scrutinize this merger, particularly in regions of high concentration of their pharmacies.”
And with other mergers this year between health insurers, hospitals, and others, Dealogic estimates that $427 billion of merger deals have been struck.
As big chains continue to merge, the independent community pharmacist will become more important than ever, Hooey said.
“While large chain pharmacies continue to merge to increase their negotiating leverage, independent community pharmacies continue to fill gaps in patient care in rural, urban, and underserved communities,” he said. “These independent community pharmacies will also continue to stand out for their sterling customer service and for providing a range of niche health care services to meet important patient needs.”