Rite Aid sold to Walgreens for $17.2 billion

[retailisking]

I think this will go more smoothly than Eckerd, though quite a few divestitures will be necessary
http://www.nytimes.com/2015/10/28/business/dealbook/walgreens-rite-aid-deal.html

[Hudsons81]

Both have a single location each in Wyandotte, Michigan, although fortunately both are on opposite ends of the city. Walgreens is at Fort Street and Eureka (west side close to my house) and Rite-Aid is on Biddle Avenue (on the east end). Both date from the first half of the 2000's.

I do know of one interesting instance in Taylor, Michigan. At Telegraph and Wick, Walgreens and Rite-Aid are across from each other. I predict that the Rite-Aid (which opened in 1997) will close and move across Telegraph to the newer Walgreens.

[ynkeesfn82]

I can predict which ones will close near me.

Rite Aid - 167 Main Street Southington, CT. Reason? It's a real small and old store. It's near Walgreen's. Southington will end up with 2 Walgreens. The other Rite Aid is a 6 year old store at 500 Queen Street.

Rite Aid - 52 East Street Plainville, CT. Reason? It's a real small old store. Once the independent Appel's Pharmacy.

Rite Aid - 430 North Main Street Bristol, CT. Reason? It's a small old store. It's in a strip mall. Walgreen's has two locations in Bristol. Both of which are new.

[store215]

Ouch...there's a lot of Walgreens/Rite Aid overlap here in Southeastern PA...although I could see a few areas where CVS will likely want to pick up a few stores. I don't usually shop at any chain pharmacy (too expensive on merchandise in the store), but I preferred Rite Aid when an emergency arose. When will these big corporate mergers end??

[BillyGr]

Do note that in the article it says that "Rite Aid will be a wholly owned subsidiary of Walgreens operating under its own brand name when the deal is completed."

So it doesn't appear that they would (necessarily) close stores just because one is near the other.

The issue may come in an area where Walgreens and Rite Aid are the ONLY stores in a given area (no nearby CVS or other pharmacy) then they might be required to sell one off to someone else.  That did happen in a very few places when Rite Aid bought Eckerd - for example in Lake Placid (NY) where they were the only two drugstores and there are no other towns close by.  In that case they sold the Eckerd location to Kinney.
Around here (upstate NY) that is minimal if at all as Walgreens has only recently opened stores and even then only a small number scattered around.  I'm sure it would be more prevalent in other areas, though.

[buzz86us]

awwww Rite Aid would only be a subsidiary? That sucks because there are so many RiteAid stores in war zone neighborhoods in Schenectady that are very old.

[JoshAustin610]

Here's the breakdown in stores for the greater Philly area; in most cases Rite Aid has considerably more locations.  I'm also including the CVS (plus Target) numbers for comparison.  The combined stores will usually give them more locations than CVS, except for a few areas (notably the Lehigh Valley and NJ Shore).

PA
Montgomery County: 14 Walgreens, 26 Rite Aid; 40 Combined.  (35 CVS, 7 Target; 42 Combined)
Bucks County: 10 Walgreens, 27 Rite Aid; 37 Combined.  (30 CVS, 4 Target; 34 Combined)
Delaware County: 9 Walgreens, 20 Rite Aid; 29 Combined.  (26 CVS, 3 Target; 29 Combined) 
Chester County: 9 Walgreens, 20 Rite Aid; 29 Combined.  (22 CVS, 3 Target; 25 Combined)

Philadelphia - Northeast: 6 Walgreens, 23 Rite Aid; 29 Combined.  (9 CVS, 2 Target; 11 Combined)
Philadelphia - North: 4 Walgreens, 29 Rite Aid; 33 Combined.  (15 CVS, 2 Target; 17 Combined)
Philadelphia - Center City: 7 Walgreens, 8 Rite Aid; 15 Combined.  (6 CVS)
Philadelphia - South: 4 Walgreens, 9 Rite Aid; 13 Combined.  (7 CVS, 1 Target; 8 Combined)
Philadelphia - West: 1 Walgreens, 11 Rite Aid; 12 Combined.  (7 CVS, 1 Target; 8 Combined)     
Philadelphia - Total: 22 Walgreens, 80 Rite Aid; 102 Combined.  (44 CVS, 6 Target; 50 Combined)     

Lehigh Valley: 8 Walgreens, 19 Rite Aid; 27 Combined.  (28 CVS, 3 Target; 31 Combined)     
Berks County: 1 Walgreens, 17 Rite Aid; 18 Combined.  (13 CVS, 3 Target; 16 Combined)     

NJ
Burlington County: 7 Walgreens, 14 Rite Aid; 21 Combined.  (17 CVS, 4 Target; 21 Combined)     
Camden County: 15 Walgreens, 32 Rite Aid; 47 Combined.  (20 CVS, 3 Target; 23 Combined)     
Gloucester County: 5 Walgreens, 13 Rite Aid; 18 Combined.  (16 CVS, 3 Target; 19 Combined)     
Cumberland/ Salem Counties: 7 Walgreens, 12 Rite Aid; 19 Combined.  (4 CVS, 1 Target; 5 Combined)     
Atlantic/ Cape May Counties: 3 Walgreens, 20 Rite Aid; 23 Combined.  (24 CVS, 1 Target; 25 Combined)
Mercer County: 4 Walgreens, 17 Rite Aid; 21 Combined.  (16 CVS, 2 Target; 18 Combined)

[mvcg66b3r]

Here's the breakdown in stores for the greater Philly area; in most cases Rite Aid has considerably more locations.  I'm also including the CVS (plus Target) numbers for comparison.  The combined stores will usually give them more locations than CVS, except for a few areas (notably the Lehigh Valley and NJ Shore).

PA
Montgomery County: 14 Walgreens, 26 Rite Aid; 40 Combined.  (35 CVS, 7 Target; 42 Combined)
Bucks County: 10 Walgreens, 27 Rite Aid; 37 Combined.  (30 CVS, 4 Target; 34 Combined)
Delaware County: 9 Walgreens, 20 Rite Aid; 29 Combined.  (26 CVS, 3 Target; 29 Combined) 
Chester County: 9 Walgreens, 20 Rite Aid; 29 Combined.  (22 CVS, 3 Target; 25 Combined)

Philadelphia - Northeast: 6 Walgreens, 23 Rite Aid; 29 Combined.  (9 CVS, 2 Target; 11 Combined)
Philadelphia - North: 4 Walgreens, 29 Rite Aid; 33 Combined.  (15 CVS, 2 Target; 17 Combined)
Philadelphia - Center City: 7 Walgreens, 8 Rite Aid; 15 Combined.  (6 CVS)
Philadelphia - South: 4 Walgreens, 9 Rite Aid; 13 Combined.  (7 CVS, 1 Target; 8 Combined)
Philadelphia - West: 1 Walgreens, 11 Rite Aid; 12 Combined.  (7 CVS, 1 Target; 8 Combined)     
Philadelphia - Total: 22 Walgreens, 80 Rite Aid; 102 Combined.  (44 CVS, 6 Target; 50 Combined)     

Lehigh Valley: 8 Walgreens, 19 Rite Aid; 27 Combined.  (28 CVS, 3 Target; 31 Combined)     
Berks County: 1 Walgreens, 17 Rite Aid; 18 Combined.  (13 CVS, 3 Target; 16 Combined)     

NJ
Burlington County: 7 Walgreens, 14 Rite Aid; 21 Combined.  (17 CVS, 4 Target; 21 Combined)     
Camden County: 15 Walgreens, 32 Rite Aid; 47 Combined.  (20 CVS, 3 Target; 23 Combined)     
Gloucester County: 5 Walgreens, 13 Rite Aid; 18 Combined.  (16 CVS, 3 Target; 19 Combined)     
Cumberland/ Salem Counties: 7 Walgreens, 12 Rite Aid; 19 Combined.  (4 CVS, 1 Target; 5 Combined)     
Atlantic/ Cape May Counties: 3 Walgreens, 20 Rite Aid; 23 Combined.  (24 CVS, 1 Target; 25 Combined)
Mercer County: 4 Walgreens, 17 Rite Aid; 21 Combined.  (16 CVS, 2 Target; 18 Combined)

You forgot Delaware (New Castle and Kent counties).

[JoshAustin610]

I'll compile Delaware in a separate post; that's a lot of Walgreens to count.

[JoshAustin610]

Here's the breakdown of stores in Delaware; many of these stores will most likely end up getting divested, assuming CVS wants those locations (and there's little reason they won't, considering how small their footprint in the state is).

New Castle County: 41 Walgreens, 24 Rite Aid; 65 Combined.  (9 CVS, 2 Target; 11 Combined)
Kent County: 9 Walgreens, 9 Rite Aid; 18 Combined.  (4 CVS, 1 Target; 5 Combined)
Sussex County: 14 Walgreens, 9 Rite Aid; 23 Combined.  (5 CVS)

Delaware Total: 64 Walgreens, 42 Rite Aid; 106 Combined.  (18 CVS, 3 Target; 21 Combined)

[MikeRa]

Ouch...there's a lot of Walgreens/Rite Aid overlap here in Southeastern PA...although I could see a few areas where CVS will likely want to pick up a few stores. I don't usually shop at any chain pharmacy (too expensive on merchandise in the store), but I preferred Rite Aid when an emergency arose. When will these big corporate mergers end??

In Center City, Philadelphia, on Market Street, you have a Walgreens at 9th, Rite Aid at 10th, and CVS at 11th, so I see this Rite Aid closing because of the other two also there.

[JoshAustin610]

There's also a Rite Aid at 8th & Market; both that one and the one on 10th were remodeled in the last year, and are both much larger than the run down Walgreens in between.  I wouldn't be surprised if the Walgreens is the one that closes, especially since it's part of the Gallery building; the developers may want something more upscale there.

[Hudsons81]

You don't just see this in Philadelphia either.

For example, the Chicago Loop alone, both sides of the river. You have several Walgreens and CVS stores within eyesight of each other and even multiple Walgreens stores that are literally stone's throws away from each other, plus, throw in a Target at Roosevelt Road and Clark (dunno if the Target in the former Carson's building at State and Madison Streets has a pharmacy). Luckily, there's no Rite-Aid within all of this...

[ynkeesfn82]

It's like this in many places. In fact several years ago the CEO of one of the companies said they prefer opening across from their competitor.

In Southington, Connecticut Walgreen's built on the site of the Old Police Station at the intersection of Main and Old Turnpike Road. I can stand in Walgreen's parking lot and throw an egg and hit the CVS building which built on the site of the old Mitchell's Ford at the corner of Main Street and Main Street. (Yes I know the corner of Main Street and Main Street sounds strange, but that's what it is).  An old smaller Rite Aid is further up Main Street, closer to where CVS used to be where Dollar Tree is now (which was a Family Dollar which was Blockbuster before that).

In Plainville, Connecticut Walgreen's built on the former Wayside Furniture and Ground Round across Farmington Ave from CVS which took over a portion of the original BIG Y (Greenfield's before BIG Y).

In Bristol, Connecticut the new CVS on Route 6 (I don't know if it's open yet) is across from the plaza where Rite Aid is. Ironically the both have the same landlord.

In 2003 or 2004 the owner of The now-demolished Bristol Center Mall wanted to build a Walgreen's in an out building in the parking lot. The crooked mayor said "no". It would've put Walgreen's directly across North Main from CVS. The CVS that is now closing (replaced by the one I mentioned above). It would be 2005 when the mayor used they city's money without the taxpayer's permission to buy the mall. 10 years later the mall is gone and aside from a new McDonald's, the old mall property is still a 15 acre vacant parcel in the middle of downtown. Walgreen's ended up building its second Bristol location around the corner from the mall at the corner of South and Main. It greatly improved that intersection. Before the Walgreen's was built the property had a vacant night club (which when it was open was a trouble spot), a pawn shop, and a building where a Mexican Restaurant had been (with apartments upstairs) that burned down "mysteriously".

[Hudsons81]

Let me post some examples of this where I am.

The Taylor, Michigan example of Walgreens and Rite-Aid across from each other.

The Wyandotte, Michigan Walgreens built on the site of the former Wyandotte YMCA and Wyandotte Savings Bank (which was later a pet store) at the northwest corner of Fort Street and Eureka. Head west on Eureka into Southgate and a minute away you have a CVS which opened in 1998 on what had been three-quarters of a former supermarket. It's physically disconnected from the rest of the Southgate Shopping Center. Head further west for a couple more minutes and at the corner of Dix-Toledo you have another CVS anchoring a strip mall.

In fact, there's this interesting situation along Fort Street alone, with several of the Big Three placed at every mile road. You have a CVS at Northline, the aforementioned Walgreens at Eureka, another Walgreens at Pennsylvania, Rite-Aid at Sibley, another CVS at King and yet another Walgreens at West Road. Head south to another mile road, Van Horn, the Trafford Square Shopping Center once had a Rite-Aid as well before that moved to Woodhaven in 2009.

[MikeRa]

There's also a Rite Aid at 8th & Market; both that one and the one on 10th were remodeled in the last year, and are both much larger than the run down Walgreens in between.  I wouldn't be surprised if the Walgreens is the one that closes, especially since it's part of the Gallery building; the developers may want something more upscale there.

I can see this Walgreens closing down as well, especiall since there is a Flagship Walgreens nearby at 1 South Broad Street, in the former John Wanamaker Mens Store/Philadelphia National - CoreStates Bank building

[Hudsons81]

This ought to be interesting...at Studio One Plaza in Detroit, Walgreens is about to open a Specialty Pharmacy in the former Biggby Coffee...and there's a Rite-Aid right across the street. It'll be interesting how this will end up and whether or not one or the other will have to close.

[JoshAustin610]

My earlier prediction about the stores in center city Philly turned out to be correct earlier than expected; the Walgreens on 9th & Market (in between Rite Aids at 8th and 10th) has closed.  Most likely it was due more to the redevelopment of the Gallery than the merger though, since that hasn't gone through yet (and is looking less likely to happen as time goes on).

[MikeRa]

My earlier prediction about the stores in center city Philly turned out to be correct earlier than expected; the Walgreens on 9th & Market (in between Rite Aids at 8th and 10th) has closed.  Most likely it was due more to the redevelopment of the Gallery than the merger though, since that hasn't gone through yet (and is looking less likely to happen as time goes on).

You are correct on the closing of this Walgreens to redevelopment.  The entire interior has been removed.

[retailisking]

That's assuming it will happen at all...meanwhile, Kroger appears to be out of the running.
http://www.retaildive.com/news/report-walgreens-may-unload-stores-to-freds-to-clinch-rite-aid-merger/432138/

[giantsfan2016]

That's assuming it will happen at all...meanwhile, Kroger appears to be out of the running.
http://www.retaildive.com/news/report-walgreens-may-unload-stores-to-freds-to-clinch-rite-aid-merger/432138/

Looks like Fred's will be buying 865 stores from Walgeens/Rite Aid.

http://www.courant.com/business/ct-walgreens-rite-aid-freds-pharmacy-20161220-story.html

[retailisking]

That's assuming it will happen at all...meanwhile, Kroger appears to be out of the running.
http://www.retaildive.com/news/report-walgreens-may-unload-stores-to-freds-to-clinch-rite-aid-merger/432138/

Looks like Fred's will be buying 865 stores from Walgeens/Rite Aid.

http://www.courant.com/business/ct-walgreens-rite-aid-freds-pharmacy-20161220-story.html

Expanding Fred's from the Southeast virtually overnight to a nationwide player with stores for California to Massachusetts is a huge deal. But do they have the wherewithal to make it work?

[store215]

Expanding Fred's from the Southeast virtually overnight to a nationwide player with stores for California to Massachusetts is a huge deal. But do they have the wherewithal to make it work?

It just sounds like a disaster in the making to me. Look up what happened to 'Haggen' in California when they went from a 14 store chain in WA state to a 130+ store chain overnight (Albertsons/Safeway had to divest stores). I don't think they lasted 6 months before they went bankrupt. And guess who scooped up what was left of Haggen? Albertsons/Safeway!

[BillyGr]

Expanding Fred's from the Southeast virtually overnight to a nationwide player with stores for California to Massachusetts is a huge deal. But do they have the wherewithal to make it work?

It just sounds like a disaster in the making to me. Look up what happened to 'Haggen' in California when they went from a 14 store chain in WA state to a 130+ store chain overnight (Albertsons/Safeway had to divest stores). I don't think they lasted 6 months before they went bankrupt. And guess who scooped up what was left of Haggen? Albertsons/Safeway!

A more precise analogy, I think, is Jean Coutu/Brooks taking over the 1,500 Eckerd locations in the Rite Aid takeover. Brooks was actually a pretty successful franchise in the Northeast pre-Eckerd, but they struggled mightily to integrate all those new stores. Currently two-thirds of Fred's stores do not have pharmacy, and their current management is banking heavily on pharmacy in transforming their business, which currently has lagging same-store sales. CVS is the master of integration in this space. We'll see if Fred's can make it work.

Actually that was the other way around - Jean Coutu took over the Eckerd stores first, then the combined Eckerd/Brooks chains were sold to Rite Aid.  At the time JC took over the Eckerd stores they did, CVS took over the rest of the Eckerd chain.

[retailisking]

Actually that was the other way around - Jean Coutu took over the Eckerd stores first, then the combined Eckerd/Brooks chains were sold to Rite Aid.  At the time JC took over the Eckerd stores they did, CVS took over the rest of the Eckerd chain.

I had a brain fart regarding the timeline and the CVS involvement. You're right - CVS took some of the Eckerd stores, and Brooks took the rest. It's the Brooks/Eckerd stores that eventually went to Rite Aid. IIRC Jean Coutu got a stake in Rite Aid as part of the latter deal. On Retailwire they're talking about the chances of this deal working out for fred's:
http://www.retailwire.com/discussion/can-freds-thrive-as-a-national-competitor/

[TheFugitive]

Personally I am expecting a lot more of this sort of thing.

I think the OfficeMax/Office Depot - Staples merger may come back to life.
The Trump Administration is going to have a very different view on these issues
than the Obama Administration did.

[retailisking]

The January 27th deadline has come and gone without closing the deal.

One account says the FTC has gotten cold feet
http://www.retaildive.com/news/walgreens-in-dialogue-with-ftc-to-finalize-rite-aid-merger/434923/

The New York Post suggests that another player (Cerberus) has re-entered the picture
http://nypost.com/2017/01/27/private-equity-firm-could-be-a-white-knight-for-walgreen-rite-aid-merger/

Another account says that is not the case
https://bnlfinance.com/2017/01/27/walgreens-rite-aid-buyout-dont-make-this-huge-mistake-wba-rad/

[giantsfan2016]

If Cerebus buys the excess Rite Aid and Walgreen's stores will they rebrand them as Osco Pharmacy?

Also do you think once the Rite Aid/Walgreen's merger is completed one brand will completely disappear?

[retailisking]

Rite Aid and Walgreens have agreed to lower the merger price, divest as many as 1,200 stores and extend the deadline to July 31st. But would fred's be able to come up with the cash to buy 1,200 divested stores?
http://www.walgreensbootsalliance.com/newsroom/news/walgreens-boots-alliance-and-rite-aid-enter-into-amendment-and-extension-to-merger-agreement.htm

[retailisking]

Walgreens appears to be losing patience with the merger evaluation process at the FTC and is mulling the possibility of forcing a decision
http://www.retaildive.com/news/walgreens-may-give-ftc-notice-of-certified-compliance-to-force-rite-aid-m/437735/