The deal combines the largest and third-largest U.S. drugstore chains, based on store counts. And it makes one of the world's largest pharmaceutical buyers even bigger at a time when other key health care players like insurers and drugmakers also are expanding through multi-billion dollar deals.
Walgreens said it will pay $9 for each share of Rite Aid Corp. That's a 48 percent premium to Rite Aid's closing price of $6.08 Monday. Shares of both companies jumped Tuesday after The Wall Street Journal first reported the deal.
A Walgreens is shown October 27, 2015 in Boulder, Colorado. Walgreens Boots Alliance will acquire Rite Aid for $9.4 billion in cash in a deal announced today that combines the largest U.S. drugstore chain Walgreens with the nation's third largest.
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Full service in a wide range of retail fields at the new Walgreen drug stores; in new Villa includes a Walgreen tradition of full prescription services, at low cost made possible by the firm's Specialization in the field. Here are Dennis Novak and Jerrold R. Fox, Pharmacists and the men who will head this new west Walgreen outlet.
(Photo By Jack Riddle/The Denver Post via Getty Images)
Walgreens employees celebrate the opening of their 4000th store.
(Photo by Steve Grayson/WireImage)
SAN FRANCISCO, CA - JULY 09: A pedestrian walks by a Walgreens store on July 9, 2015 in San Francisco, California. Walgreens Boot Alliance Inc. reported better than expected third quarter profits with net earnings of $1.3 billion, or $1.18 per share, compared to $714 million, or $0.74 per share one year ago. (Photo by Justin Sullivan/Getty Images)
NEW YORK - FEBRUARY 17: A man walks outside of a Duane Reade drugstore February 17, 2010 in New York City. Walgreen Corporation announced that it will buy the New York City-based drugstore chain for $1.1 billion in cash. (Photo by Chris Hondros/Getty Images)
Pedestrians walk past a Walgreens Boots Alliance Inc. store in New York, U.S., on Wednesday, June 10, 2015. Walgreens is redoing its stores with what's meant to be a more appealing cosmetics area with a wider array of products, even as it scales back its fresh food offering. Most prominent will be the companys own Boots No7 skincare line, which has proved successful at drawing customers to stores in Europe. Photographer: Michael Nagle/Bloomberg via Getty Images
Shoppers look at items on sale at a Walgreens store in New York, U.S., on Monday, March 23, 2009. Walgreen Co., the second-largest U.S. drugstore chain, jumped the most in almost five months in New York trading after second-quarter profit and sales exceeded analysts' estimates.
(Photo by Andrew Harrer/Bloomberg via Getty Images)
Walgreens opens a new store on Forest Ave. in Portland.
(Photo by John Patriquin/Portland Press Herald via Getty Images)
Walgreen's balloons sit atop a display at a Walgreen's store in New York, U.S., on Wednesday, Feb. 17, 2010. Walgreen Co., the biggest U.S. drugstore chain, agreed to buy Duane Reade Holdings Inc. from affiliates of Oak Hill Capital Partners for $618 million to expand in metropolitan New York.
(Photographer: JB Reed/Bloomberg via Getty Images)
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The companies said the deal is worth $17.2 billion, when debt is included.
Walgreens Boots Alliance Inc. has more than 13,100 stores around the world. Rite Aid, which is based in Camp Hill, Pennsylvania, has more than 4,600 stores in the U.S.
The companies expect the deal to close in the second half of next year, although given that it is combining the No. 1 and No. 3 players in its industry, it could draw close scrutiny from anti-trust regulators.
It comes less than year after Walgreens bought European health and beauty retailer Alliance Boots. Besides its namesake stores, Deerfield, Illinois-based Walgreens also owns Duane Reade stores in the U.S.