Fitch puts Rite Aid on positive watch

Fitch Ratings said it placed the ratings on Rite Aid Corp. on Rating Watch positive.

The positive watch follows news that Walgreens Boots Alliance, Inc. will acquire all outstanding shares of Rite Aid for $9.00 per share in cash for a total enterprise value of about $17.2 billion, including acquired net debt, Fitch said.

Walgreens Boots will finance the deal with existing cash, new debt issuance and assumption of existing Rite Aid debt, the agency said.

The acquisition is expected to close in second half 2016, subject to approval by Rite Aid shareholders and anti-trust regulators, Fitch said.

Rite Aid currently has a long-term issuer default rating of B.

The merger will solidify Walgreens Boots’ dominant position in the U.S. retail prescription market with a combined sales base of $115 billion on about 13,000 stores and the No. 1 retail prescription share at 25% to 26%, Fitch said.

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