Walgreens and Fred’s, Inc have revealed that the companies have entered into a definitive asset purchase agreement, pursuant to which Walgreens will acquire pharmacy patient prescription files and related pharmacy inventory of 185 Fred’s stores located across 10 Southeastern states.
Under the agreement, the aggregate consideration to be paid by Walgreens to Fred’s is $165mn, subject to adjustment, plus an amount equal to the value of related pharmacy inventory.
“This agreement increases patient access to Walgreens pharmacies and allows us to introduce more people to Walgreens trusted pharmacy services in these communities,” said Richard Ashworth, Walgreens President of Operations.
The transaction is part of a previously announced plan by Fred’s to unlock shareholder value by monetising non-core assets through strategic transactions. Fred’s will continue to operate its retail stores at most of these locations after the pharmacies close.
Once the transaction is complete, Fred’s will continue to operate approximately 162 pharmacies across nearly 600 stores. Shares of Fred’s rose significantly after the announcement.
Once patient prescriptions are transferred from Fred’s to Walgreens, patients will have access to the nation’s largest drugstore’s trusted pharmacy services across a network of approximately 9,800 pharmacies nationwide.
Each day, approximately 8mn customers interact with Walgreens in stores and online. As of this year, the business operates approximately 9,800 drugstores with a presence in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands, along with its omnichannel business, Walgreens.com.