Walgreens to grow by 1,932 stores with Rite Aid deal

CHICAGO — After years of trying, Walgreens Boots Alliance has received clearance from the Federal Trade Commission to expand its business through the purchase of 1,932 Rite Aid stores for $4.38 billion.

The FTC had long resisted a deal between Walgreens and competitor Rite Aid, forcing the two to revise terms of a transaction several times since they proposed their merger in 2015. Originally, Walgreens, based in suburban Chicago, had hoped to buy all of Rite Aid, America's thirdlargest drugstore chain, in a deal then valued at $17.2 billion, including debt.

The deal announced Tuesday is smaller than the most recent agreement reached in June, which had Walgreens buying 2,186 Rite Aid stores (about half of Rite Aid's locations), three distribution centers and other inventory for $5.18 billion. The distribution centers and inventory remain part of the deal. Most of the stores it will buy are in the Northeastern and Southern U.S., and will be converted to Walgreens stores over time.

The transaction could increase Walgreens' ability to negotiate lower prices on products, including drugs, which could mean lower prices on some drugs for consumers, said Vishnu Lekraj, a senior analyst with Morningstar. It also allows the chain to expand its market share and go into new markets more cheaply than if it'd opened its own stores.

The smaller deal was "based on ongoing conversations with the FTC," said Walgreens spokesman Michael Polzin in an email.