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Walgreens Boots Alliance near deal to buy Rite Aid: report

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Drugstore operator Walgreens Boots Alliance Inc. is in advanced talks to buy rival Rite Aid Corp, a source familiar with the matter told Reuters.

The Wall Street Journal reported the news earlier on Tuesday and said a deal was expected to be announced by Wednesday.

Shares of Rite Aid, which had a market value of $6.36 billion as of Monday close, rose as much as 44 per cent to $8.74,  valuing the drugstore chain at $8.7 billion.

Walgreens shares rose as much as 5.8 per cent to $94.69.

Rumors of a combination between the two companies have circulated for years. The rumours have gained ground earlier this year

The Rite Aid deal would give Walgreens its first foray into the business of managing drug benefits for insurers and employers, an area where rival CVS Health Corp. is a leader.

Rite Aid entered that business by acquiring Envision Pharmaceutical Services Inc. for about $2 billion this year.

Rite Aid was founded by Jewish businessman Alex Grass. For years he headed the board of governors of the Hebrew University of Jerusalem. Alex Grass died in 2009, after a ten-year-long battle with lung cancer.

Rite Aid had a major accounting scandal that led to the departure (and subsequent jail time) of several top ranking executives, including the CEO, Martin Grass, son of company founder Alex Grass. After serving six years in prison, Martin Grass was released on January 18, 2010. 

 

 

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