REAL ESTATE

Rite Aid completes more than half of its store transfers to Walgreens

BY Deena M. Amato-McCoy

The Rite Aid-Walgreens transition is on track to be completed by spring.

Rite Aid has successfully transferred 1,114 stores to Walgreens Boots Alliance, and has received cash proceeds of $2.424 billion, which the company continues to use to reduce debt. The drugstore chain expects to finish the transfer by spring, according to Rite Aid.

Walgreens purchased a total of 1,932 stores, three distribution centers and related inventory from Rite Aid for $4.375 billion in cash.

The majority of the closing conditions have been satisfied. Upcoming transfers of Rite Aid stores and related assets will be subject to minimal customary closing conditions, as specified in the Asset Purchase Agreement, according to the company.

“We have now completed more than half of the planned store transfers and remain on track to finish the process in the spring of this year,” said Rite Aid chairman and CEO John Standley. “As we work to complete this process, we remain focused on opportunities to build our business while delivering a great experience to our customers and patients and driving value for our shareholders.”

Most of the stores being sold to Walgreens are in the southeastern U.S., leaving Rite Aid with the majority of its stores on the East and West coasts.

The sale — and ongoing transition of stores — bolstered the drug chain’s profits for the third quarter. Net income rose to $81.03 million, in the quarter ended Dec. 2, from $15.01 million.

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