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Walgreens, Rite Aid End $9.4 Billion Merger; Walgreens to Buy Half of Rite Aid Stores

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https://www.wsj.com/articles/walgreens-rite-aid-end-9-4-billion-merger-walgreens-to-buy-half-of-rite-aid-stores-1498735324?mod=e2fb


Upon closing, Walgreens will start acquiring the Rite Aid stores, three distribution centers and related inventory over a six-month period. The stores eventually will be converted to the Walgreens brand.

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rated:
This is bad news for Rite Aid  deal shoppers (although better than a complete merger). 

Here is some more information from USA Today:

Walgreens said Thursday that it would pay $5.175 billion for 2,186 Rite Aid  stores, three distribution centers and inventory in those locations. Rite Aid  , which currently has about 4,600 locations, is selling locations primarily located in the Northeast, Mid-Atlantic and southeastern U.S.

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roy7736 said:   This is bad new for Rite Aid  deal shoppers. Does anyone know what will determine which stores are bought by Walgreens and which stores will remain as Rite Aid  ?
  

I haven't yet found that info as to what stores/areas will change to Walgreen's.   I think it's fair to say areas of the Northeast will lose at least 1/2 their RA's where Walgreens has no or a limited presence currently.

It also has to make you wonder with 1/2 the stores, making it a much smaller chain, if they'll continue the Plenti program and how competitive  they will be since their buying power as a chain in substantially reduced.

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roy7736 said:   This is bad news for Rite Aid  deal shoppers (although better than a complete merger). 

Here is some more information from USA Today:

Walgreens said Thursday that it would pay $5.175 billion for 2,186 Rite Aid  stores, three distribution centers and inventory in those locations. Rite Aid  , which currently has about 4,600 locations, is selling locations primarily located in the Northeast, Mid-Atlantic and southeastern U.S.

  

Roy, that info is vague,, as the bulk of RA's are in those areas. I guess California is omitted which is good news for Mr. V (assuming the PLENTI program remains)

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MISTERCHEAP said:   
roy7736 said:   This is bad news for Rite Aid  deal shoppers (although better than a complete merger). 

Here is some more information from USA Today:

Walgreens said Thursday that it would pay $5.175 billion for 2,186 Rite Aid  stores, three distribution centers and inventory in those locations. Rite Aid  , which currently has about 4,600 locations, is selling locations primarily located in the Northeast, Mid-Atlantic and southeastern U.S.

  

Roy, that info is vague,, as the bulk of RA's are in those areas. I guess California is omitted which is good news for Mr. V (assuming the PLENTI program remains)

Right, I hope the Rite Aids in California (of which there are many) will be spared. However, like you said, time will tell if they stay in PLENTI and with such a limited presence what kind of deals will they have going forward. If PLENTI wasnts to thrive and become more relevant and attractive they need to sign up some more big companies to participate in the PLENTI rewards program. I wish a big company like Kroger or Safeway would start using PLENTI.

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MrVietnam said:   
MISTERCHEAP said:   
roy7736 said:   This is bad news for Rite Aid  deal shoppers (although better than a complete merger). 

Here is some more information from USA Today:

Walgreens said Thursday that it would pay $5.175 billion for 2,186 Rite Aid  stores, three distribution centers and inventory in those locations. Rite Aid  , which currently has about 4,600 locations, is selling locations primarily located in the Northeast, Mid-Atlantic and southeastern U.S.

  

Roy, that info is vague,, as the bulk of RA's are in those areas. I guess California is omitted which is good news for Mr. V (assuming the PLENTI program remains)

Right, I hope the Rite Aids in California (of which there are many) will be spared. However, like you said, time will tell if they stay in PLENTI and with such a limited presence what kind of deals will they have going forward. If PLENTI wasnts to thrive and become more relevant and attractive they need to sign up some more big companies to participate in the PLENTI rewards program. I wish a big company like Kroger or Safeway would start using PLENTI.

  

or if Walgreens adopted the program, I'd be happy (assuming the payouts/earn potential stayed the same) but I honestly don't see that happening with their in house balance rewards program.

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According to the USA Today article (link posted above):

Rite Aid  is exiting South Carolina, Utah and Indiana, and will have one or two stores apiece in Mississippi, Georgia, Alabama, Maine, Rhode Island, West Virginia, Kentucky and Nevada. The company is also selling most of its stores in Colorado, Tennessee, Louisiana, Vermont, North Carolina and Massachusetts.

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I really dislike Walgreens, so if my Rite Aids go away, I will take my biz to CVS.

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To quote the NY Times article (link posted above):

"What Rite Aid  will be left with, that company argues, is a smaller store base — but one with some of its best-performing locations. Its remaining stores will be concentrated on the West Coast, New Jersey, Ohio, Michigan and Pennsylvania."

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I think this will be a real hardship on small towns in Kentucky.  My little town has all 3 drugstores, but some of the really small towns around me only have a Rite Aid and I doubt Walgreens would be interested in those.  The town 20 miles east, only has a couple dollar stores, IGA, and RA.  The pharmacy portion in these RA are always packed.  I am pretty sure that RA is the only chain pharmacy in half of our towns.

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MrVietnam said:   To quote the NY Times article (link posted above):

"What Rite Aid  will be left with, that company argues, is a smaller store base — but one with some of its best-performing locations. Its remaining stores will be concentrated on the West Coast, New Jersey, Ohio, Michigan and Pennsylvania."

  
I wonder about the NYC area/CT stores where they have a fair number.   My other big ?? is the Plenti program and how it will be affected with a much smaller chain.

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Hopefully they'll leave some RAs open in DE & NH. No sales tax and both are accessible enough that people frequently cross state lines to do their shopping.

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I used to live in MD, and originally there was a CVS South & East of me, and RA North & East of me. RA took over a White Shield drug South of me, and CVS took over a Faye's Drugs North of me. The CVS's have always been busy. The RA's have struggled. The one to the East closed, couldn't compete with the CVS across the street. The RA to the South (former White Shield) closed several years after opening. The one to the North has been struggling, it came very close to closing numerous times. It didn't help that the store was small and old. The store was relocated to the location of a former Giant PA who had built a brand new store on the other side of town. Even after the move to a newer, larger, location, it still struggled.

I now live in DE, which is Walgreens country after they acquired the Happy Harry's chain. There are some RA's in neighborhoods where a Happy Harry's Walgreens is. CVS doesn't have a large presence, they have gradually been expanding. When the whole merger talk started, there were a lot of questions as to what would happen to most of the RA's, since they share a neighborhood with WAG's, and turning them into WAG's wouldn't work, due to close proximity. CVS expressed a huge interest in acquiring existing RA's that WAG's would close. This would save CVS a lot of money, cheaper to remodel former RA's then build new stores. Another possible new tenant is Aldi, who has also expressed interest in RA's that neither WAG's or CVS want.

Should be interesting to see what happens now. I suspect some of the older, none Wellness RA's will still close. These are the ones in strip malls, or in commercial buildings in Wilmington & Newark. RA will close a significant number of locations, WAG's will take the ones in areas where there isn't a WAG's (like 2 miles West of me). Will have to see if there is still something in place for CVS & Aldi.

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MISTERCHEAP said:   
MrVietnam said:   To quote the NY Times article (link posted above):

"What Rite Aid  will be left with, that company argues, is a smaller store base — but one with some of its best-performing locations. Its remaining stores will be concentrated on the West Coast, New Jersey, Ohio, Michigan and Pennsylvania."

  
I wonder about the NYC area/CT stores where they have a fair number.   My other big ?? is the Plenti program and how it will be affected with a much smaller chain.

  I am in Putnam/Dutchess Co NY. We have about 6 RA in my area including Danbury CT/New Milford area. No Walgreen's near me. This could be bad, and PP will probably disappear based on my intuition, as a former biz owner. Why spend tons of cash to acquire something,and then give it away via PP? Although as a manufactured spender, both chains cut us out 2 years ago. Buying 1 Visa Gift card per day at Walgreens is hardly worth it.  RA has a cash only policy for Visa, etc gift cards. Any thoughts on how this affects CVS, as they are big in the MS game.

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Store near my office told me last year that they'd become a Wags if sale went through.  Suspect they're one of the stores sold.
My local store performs well so will ask SM today.
There are a lot of small probably not very profitable stores in the state.  Hoping the 6 that they keep are near me.

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